Here are the top reads on deals and financial services over the last week. Have a great weekend,
Quebec billionaire Pierre Karl Péladeau is weighing a bid for Transat: The media magnate, chief executive and controlling shareholder of Quebecor Inc., confirmed on Thursday that he has hired an investment banker to advise him on a potential offer for Montreal-based Transat A.T. Inc. He suggested part of his motivation for getting involved in the process was to prevent the company from falling into the hands of non-Quebec interests. Story (Nicolas Van Praet, for subscribers)
Hydro One starts new era with dividend increase: Toronto-based Hydro One introduced newly named CEO Mark Poweska to shareholders at Thursday’s meeting, one day before the former BC Hydro executive formally takes the reins. Mr. Poweska’s brief speech focused on serving customers in Ontario – and made no mention of the U.S. expansion strategy introduced by his predecessor, Mayo Schmidt. Story (Andrew Willis, for subscribers)
Brookfield sees opportunities in undervalued stocks not part of index funds: Brookfield has acquired US$55-billion of assets in the past two years by taking seven public companies private, CEO Bruce Flatt said – and he sees it continuing. Mr. Flatt said increased program trading by computers is creating greater volatility in the stock markets, and passive indexing, where investors avoid stock-picking and buy a fund based on an entire index, is helping undervalue smaller companies that don’t fit neatly in an index. Story (David Milstead, for subscribers)
Sun Life share buyback won’t stop future business-building acquisitions:The comment from executives came as Sun Life Financial reported first-quarter “underlying” net income of $717-million, or $1.20 a share, as of March 31, 2019. Analysts expected, on average, $1.21 per share, according to I/B/E/S data from Refinitiv. This was down from $770-million, or $1.26 a share, a year prior. Story(Clare O’Hara, for subscribers)
OSC reaches settlement with Alex Tapscott, blockchain fund over alleged violations: Blockchain entrepreneur Alex Tapscott has reached a settlement with Ontario’s securities watchdog after the regulator investigated allegations that he created misleading marketing materials when raising money. In a statement of allegations made public Thursday, the Ontario Securities Commission alleged that Mr. Tapscott and his fund, NextBlock Global Limited, made statements in marketing materials that were “misleading or untrue or did not state a fact that was required to be stated or that was necessary to make the statements not misleading.” Details of the settlement are not yet public. Story (Alexandra Posadzki and Tim Kiladze, for subscribers)
Top female executive at TD Securities Martine Irman set to retire from bank: The capital markets industry has changed dramatically since Martine Irman first stepped onto the trading floor at TD Securities three decades ago. Hand signals and “hoot-n-holler” telecom systems have been replaced by computers outfitted with messaging apps. Paper wads no longer soar through the air. And, importantly, there are far more women around. Story (Alexandra Posadzki, for subscribers)
Aviso Wealth hires former Scotia Wealth Management executive as chief investment officer: Independent wealth manager Aviso Wealth Inc. has hired former Scotia Wealth Management executive John Bai as its chief investment officer with an eye to boosting its socially responsible investment arm, NEI Investments. Story (Clare O’Hara, for subscribers)
Home Capital Group profit dips in first quarter: Home Capital Group Inc.'s first-quarter profit slipped nearly 20 per cent lower year over year as the alternative mortgage lender issued new loans at a slower pace amid softer housing markets. New mortgage originations totalled $1.22-billion, including $933-million in residential mortgages. Story (James Bradshaw, for subscribers)
SNC-Lavalin weighs breakup amid stock slide, investors told in private meeting: SNC-Lavalin Group Inc. has told investors it is considering breaking up the company by spinning out some businesses before its criminal case ever gets to trial, a move that could include carving out British unit WS Atkins. Executives with the Montreal-based engineering giant, which is charged with bribery and fraud in a case that has created political turmoil for the Trudeau government, told institutional investors at a private luncheon last Friday that its so-called “Plan B” is about generating more value for all stakeholders and that certain businesses could be spun out, according to two people who participated in the meeting. Story(Nicolas Van Praet and Tim Kiladze, for subscribers)
Scotiabank shuffles key executives, spins out expanded wealth management as separate unit: Bank of Nova Scotia is shuffling key executives as it spins out its expanded wealth management business as a separate division. The bank’s wealth management results are currently reported as part of its Canadian banking arm, but will formally become a standalone business line on November 1. Story (James Bradshaw, for subscribers)
Ontario is finally regulating the terms financial planner and financial adviser, to the benefit of everyone: The recent 2019 Ontario Budget finally introduced a proposal that is long overdue – formally regulating the terms financial planner and financial adviser. While specific details about proficiency standards are yet to come, most of us in the financial advice and investment industry are eager to have a valid framework in place as soon as possible. Opinion (Darren Coleman)
85 per cent of money invested in Canadian VC funds went to funds with no female partners: report: Eighty-five per cent of money invested in Canadian venture-capital funds last year went to funds with no female partners, a new report says. Gender imbalance in the Canadian venture-capital (VC) sector, and the companies it funds, has long been widespread. Story (Josh O’Kane, for subscribers)
Canopy Growth’s U.S. deal faces new challenge after hedge fund opposes it: A small but vocal hedge fund has come out against Canopy Growth Corp.'s attempt to acquire a U.S. cannabis producer, complicating a situation already strained by shareholders’ confusion about the complex transaction. Story (Tim Kiladze, for subscribers)
Layer 6 founders launching $350-million AI-focused venture fund: The chief of business and strategy for artificial intelligence at Toronto-Dominion Bank is leaving just 16 months after selling his startup to the financial services giant for $100-million to launch a venture capital fund backed by some of Canada’s largest institutions – including his recent employer. Story (Sean Silcoff, for subscribers)
Hudson’s Bay looks to put troubled Lord & Taylor on the block: Hudson’s Bay Co. is considering selling its troubled U.S. Lord & Taylor department-store chain. The Toronto-based retailer, whose chains include its namesake and Saks Fifth Avenue, said on Monday it is pursuing “strategic alternatives” for Lord & Taylor, among them a possible sale or merger as part of its strategy to focus on its biggest opportunities. Story (Marina Strauss, for subscribers)
Bank of Canada urges lenders to offer longer-term mortgages: Bank of Canada Governor Stephen Poloz is hitting back at critics who say stricter mortgage rules are stifling the housing market, urging lenders to instead fix the problem themselves by offering longer-term mortgages. A lack of innovation means lenders often steer borrowers into five-year, fixed-rate mortgages, when longer-term loans might help them get the home they really want, Mr. Poloz told a business audience in Winnipeg Monday. Story (Barrie McKenna, for subscribers)
BMO’s new private wealth strategy seems to be working under Auerbach’s guidance: When Andrew Auerbach took the top job at BMO Nesbitt Burns Inc. early last year, the retail brokerage firm had gone off course. A number of advisers were threatening to leave, morale was at a low point and the business had been leaderless for six months. Discontent was so widespread that, in an annual industry survey by Investment Executive newspaper in 2017, a majority of the bank’s investment advisers who responded ranked their firm below industry averages. That placed BMO Nesbitt Burns as the lowest-rated investment dealer among both banks and independent firms. Story (Clare O’Hara, for subscribers)
MORE FINANCIAL SERVICES NEWS AND DEALS NEWS FROM FRIDAY
Quebec businessman Dominik Pigeon joins list of those expressing interest in buying Transat AT: The list of Quebec players interested in acquiring Transat AT is getting longer with the addition of a group led by the head of financial services company FNC Capital, The Canadian Press has learned. Story (Canadian Press, for subscribers)
Wells Fargo CEO search hobbled by pay limitations, sources say: Wells Fargo & Co.’s hunt for a new CEO is being impeded by limits on how much the bank can pay its next leader, a person close to the search and several industry insiders told Reuters. Story (Reuters)
Occidental CEO Vicki Hollub touts deal with Warren Buffett that helped secure US$38-billion purchase of Anadarko: Occidental Petroleum Chief Executive Vicki Hollub on Friday touted her US$38-billion deal for Anadarko Petroleum Corp. – and defended the pricey terms she negotiated with billionaire investor Warren Buffett to secure the deal without seeking shareholder approval. Story (Reuters)
WeWork’s starry-eyed valuation fuels skeptics ahead of potential IPO: WeWork’s US$47-billion valuation as it heads toward what may be the year’s largest initial public offering after ride-hailing firm Uber has made the flexible-office-space startup the envy of landlords and the target of skeptics at a time when rents have barely kept pace with inflation. Story (Reuters, for subscribers)
Danske Bank appoints new CEO to rebuild trust in wake of money-laundering scandal: Danske Bank hired former ABN AMRO banker Chris Vogelzang as its new chief executive on Friday as it wrestles to limit the fallout from its involvement in a major money-laundering scandal. Story (Reuters, for subscribers)
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