Happy Canada Day! Here are the top reads on deals and financial services over the last week. Enjoy the long weekend,
CPPIB joins consortium to buy Merlin Entertainments, owner of Legoland, Madame Tussauds, Sea Life: Not everything is awesome at the British-based owner of Legoland amusement parks, and that’s allowing the Canada Pension Plan Investment Board to buy into the business. CPPIB is joining the founding family behind Legos and a unit of the Blackstone Group LP to purchase Merlin Entertainments PLC, a public company that has struggled with its share price since a 2013 initial public offering. Story (David Milstead)
Libra might be the wake-up call governments need to regulate every aspect of, or even break up, Facebook: The media and political reaction to Facebook’s launch of a global cryptocurrency, known as Libra, and the digital wallet that would go with it, Calibra, was one of near hysteria. Facebook is already too big, too powerful, too intrusive. Mark Zuckerberg’s monster can’t be trusted to protect your privacy or be socially responsible. It has become a propaganda tool for killers, as the video of the massacre at two mosques in New Zealand proved. Opinion (Eric Reguly)
Ontario Teachers’ sets sights on space with investment in Elon Musk’s SpaceX: The new division of the Ontario Teachers’ Pension Plan that seeks disruptive investments is backing one of the most disruptive executives of today by pumping money into Elon Musk’s SpaceX. Mr. Musk, perhaps best known as the chief executive officer of publicly traded automaker Tesla Inc., is also the founder of SpaceX, a privately held company that ultimately aims to send a commercial spacecraft to Mars. The company has made more than 75 successful rocket launches, Teachers said, and it’s developing a satellite system that would offer a global broadband internet network. Story (David Milstead)
Transat agrees to be bought by Air Canada for $520-million; shares slide: Transat AT Inc. has agreed to a $520 million takeover by Air Canada, but one major shareholder said yesterday the offer was too low and urged a rival bidder to renew its efforts. The all-cash deal, worth $13 for each Transat share, comes after 30 days of exclusive talks between the two airlines and is expected to be completed by 2020, the companies said in a joint statement on Thursday morning. Story (Eric Atkins)
Citi is bullish on Canadian bank stocks, one in particular: There’s been more negativity than usual surrounding domestic banks stocks lately thanks to U.S. hedge fund manager Steve Eisman, but a Citi research report released Thursday offers investors’ favourite sector some support. Story (Scott Barlow)
Scotiabank sells Puerto Rico and Virgin Island operations for $300-million net loss: Bank of Nova Scotia is unloading its operations in Puerto Rico and the U.S. Virgin Islands at a loss as the bank continues to shrink its sprawling global footprint. Story (Tim Kiladze)
Peloton Capital makes first major investment, taking a stake in a national chain of dental offices: Private equity fund Peloton Capital Management is investing $75-million in national chain 123Dentist Inc., the latest financial player to target dentistry as an industry that’s ripe for consolidation. Story (Andrew Willis)
Private capital still ‘male-dominated sector,’ CVCA says: With women making up just 12 per cent of managing partners at Canadian private-equity and venture-capital firms, the industry still has “a lot of work to do” in developing the careers of women and visible minorities, according to the head of the Canadian Venture Capital & Private Equity Association. Story (Stefanie Marotta)
Pieridae Energy to buy Shell’s southern Alberta assets for $190-million as part of plan to build LNG plant in Nova Scotia: Pieridae Energy Ltd. is buying Royal Dutch Shell PLC’s southern Alberta foothills assets for $190-million, boosting output that would flow to its planned liquefied natural gas plant in Nova Scotia. Under the deal, Pieridae will pay $175-million in cash and issue $15-million in shares to Shell. It will fund the cash portion by issuing debt and equity, it said. Story(Jeffrey Jones)
Barrick doubles down on allegations of overvaluation by Acacia: Barrick Gold Corp. says its proposal to acquire Acacia Mining PLC is “fair,” and it’s doubling down on claims that its London-based subsidiary has overvalued some of its mines. In a statement on Wednesday, Barrick said that “certain assumptions made by Acacia in relation to its mine plans are not appropriately risked or supportable and that adjustments should be made.” Story (Niall McGee)
End of an era as Bombardier sells regional jet program to Japan’s Mitsubishi Heavy Industries: Bombardier has struck a deal to sell its money-losing regional jet program to Japan’s Mitsubishi Heavy Industries Ltd., bringing to a close the Montreal-based company’s commercial ambitions in aviation after a three-decade expansion. Mitsubishi will pay US$550-million in cash and assume liabilities worth about US$200-million for the Canadair Regional Jet (CRJ) program, the companies said in a joint statement Tuesday. Story (Nicolas Van Praet)
Land & Buildings acquires portion of Ontario Teachers’ Hudson’s Bay stake, as opposition to take-private bid grows: Opposition is building to a $1-billion offer to take Hudson’s Bay Co. private. U.S. hedge-fund firm Land & Buildings Investment Management LLC, an investor in HBC that has attacked the $9.45-a-share go-private bid as being too low, has bought up more shares of the retailer, said a source familiar with the situation. Land & Buildings acquired some of the HBC shares that Ontario Teachers’ Pension Plan sold at $9.45-a-share last week, said the source, who was granted anonymity by The Globe and Mail because the person was not authorized to speak publicly. Story (Marina Strauss)
Catalyst Capital buys 18-million share stake in HBC from Ontario Teachers’, plans to oppose Baker bid: Activist fund manager Catalyst Capital Group Inc. acquired a minority stake in Hudson’s Bay Co. last week and plans to oppose a $1-billion buyout offer for the retailer led by its executive chairman, Richard Baker. Catalyst, a Toronto-based fund controlled by financier Newton Glassman, snapped up a significant portion of a 10 per cent stake in Hudson’s Bay sold by the Ontario Teachers’ Pension Plan, according to a Catalyst spokesperson. Story (Andrew Willis)
CI Financial appoints Darie Urbanky as new president: Darie Urbanky has been appointed as CI Financial Corp.’s new president, effective immediately. Mr. Urbanky, who is also CI’s chief operating officer, has been with the company for 23 years. Over that time he has worked in a number of senior positions in technology and operations, which supported various departments across CI, including investment management, advisory and wealth management operations, sales and marketing, and corporate systems. Story (Clare O’Hara)
Acacia Mining says Barrick offer doesn’t fairly value company: Acacia Mining PLC says Barrick Gold Corp.’s takeover proposal undervalues the company, prompting Acacia to push its biggest shareholder to table a “fair” bid. Last month, Toronto-based Barrick said it was willing to acquire the 36.1 per cent of London-based Acacia that it doesn’t already own for US$285-million in stock. At the time, the proposal was worth roughly 9 per cent less than Acacia’s market value. Story(Niall McGee)
Onex slashed proposed offer for WestJet because of grounding of Boeing 737 Max planes: Onex Corp. slashed its proposed offer for WestJet Airlines Ltd. as a result of the grounding of the airline’s Boeing 737 Max aircraft and other uncertainties before agreeing to pay $31 a share for Canada’s second-biggest carrier. The Toronto-based private equity fund on March 25 made a written, nonbinding offer of $35.75 a share to buy the Calgary-based airline, with conditions that included satisfactory due diligence. Story (Eric Atkins)
The rise of ETFs is making life miserable for Canada’s mutual fund industry: Canadian mutual-fund sales will never again outsell Canadian exchange-traded funds in a single year, according to Matt Hougan, chairman of Inside ETFs. The bold prediction was made last week during the Inside ETFs Canada conference in Montreal, as Mr. Hougan discussed the growth of the Canadian ETF market in comparison with the United States. Story (Clare O’Hara)
Sale of Fortress’s Collier Centre leaves investors empty-handed: Investors who provided $53-million in syndicated mortgage financing for one of the largest projects being developed by Fortress Real Developments Inc. have been notified they will recover nothing on their investment. The Collier Centre condominium and commercial site, based in downtown Barrie, Ont., has had a troubled history and was seized last year by senior lender Morrison Financial Realty Corp., which was owed $29.6-million on its mortgage loan to Fortress. Story (Janet McFarland)
The key to GFL’s billion-dollar IPO: shrinking the heavy debt load: The timing of GFL Environmental Inc.'s plan to go public is nearly perfect. Stock markets are on fire, and rival waste-management companies are watching their share prices soar. But there is a variable that clouds GFL’s future, one that could prevent the waste-management company from attaining a premium valuation: its large debt load. Story (Tim Kiladze)
Toronto startup Xanadu raises $32-million to help build ‘world’s most powerful computer’: A Toronto startup aiming to build the world’s most powerful computer by harnessing the quantum properties of light has raised $32-million from leading early stage financiers in Canada and the United States. The financing for three-year-old Xanadu Quantum Technologies Inc. was led by Ontario Municipal Employees Retirement System (OMERS) and backed by Canada’s Georgian Partners Inc., Radical Ventures and Real Ventures, American billionaire venture capitalist Tim Draper and Silicon Valley Bank. Story (Sean Silcoff)
MORE FINANCIAL SERVICES NEWS
Deutsche Bank debating up to 20,000 job cuts: reports: Deutsche Bank AG is considering cutting 15,000 to 20,000 jobs, or more than one in six full-time positions globally, the Wall Street Journal reported on Friday, citing people familiar with the discussions. Story (Reuters)
The Streetwise newsletter is Tuesday to Saturday. If you’re reading this on the web, or if someone forwarded this e-mail to you, you can sign up for Streetwise and all Globe newsletters on our signup page.