Here are the top reads on deals and financial services over the last week. Have a great weekend!
Women will have $4-trillion to invest in the next decade. Is the industry ready? Female investors are on track to manage more than $4-trillion over the next decade, prompting the financial-services industry to rethink the way investment advisers conduct business. Currently, Canadian women directly control approximately $2.2-trillion of personal financial assets, a number that will grow by more than 70 per cent by 2028, according to a report released this week by CIBC World Markets Inc. Story (Clare O’Hara, for subscribers)
Montreal software firm Lightspeed jumps in its TSX debut: Shares of Montreal software firm Lightspeed POS Inc. jumped to $18.56 on their first day of trading on the Toronto Stock Exchange. The 14-year-old company, which provides retailers and restaurants with cloud-based software to help them manage point-of-sale and back-office functions on a range of digital devices, had priced its shares at $16 apiece on Thursday – above the $13 to $15 range it had previously disclosed. Story (Alexandra Posadzki)
Scotia nabs debt capital markets bankers from BMO Nesbitt Burns: Scotia Capital Inc. has nabbed four debt capital markets bankers from its rival BMO Nesbitt Burns Inc. Bob Nguyen has been hired on as the new head of debt capital markets, according to people familiar with the matter. Previously, Mr. Nguyen was head of North American debt capital markets and capital restructuring at Bank of Montreal’s capital markets arm. Story (Alexandra Posadzki, for subscribers)
RBC drops appeal of British tribunal ruling in case involving former trader and whistle-blower: Royal Bank of Canada has abandoned its appeal of a British employment tribunal’s ruling that the bank wrongly dismissed a former trader who tried to blow the whistle on what he considered a lax compliance culture. On Wednesday, RBC agreed to pay the full costs incurred by John Banerjee, the former foreign-exchange trader from its London office, in contesting the bank’s appeal, less than an hour before he planned to apply for a costs award. Story (James Bradshaw, for subscribers)
Scotiabank CEO calls for national energy strategy to lure foreign capital back to oil sands: Governments across Canada must find a way to align on an economic strategy that reduces the length of time it takes to get major projects such as pipelines approved and built, Brian Porter, chief executive officer of Bank of Nova Scotia, said on Thursday. A national strategy would attract foreign capital back to the oil and gas industry and allow the benefits to accrue across the country, Mr. Porter told a Calgary Chamber of Commerce audience. Story (Jeffrey Jones, for subscribers)
Telfer poised for $12-million payment in Newmont deal: Ian Telfer is poised for a big payout if Newmont Mining Corp. succeeds in its US$10-billion acquisition of Goldcorp Inc. The long-time Goldcorp chairman would be entitled to a lump sum retirement cash payment of US$12-million, Goldcorp said in a regulatory disclosure on Thursday. Previously, the company had said he would receive US$4.5-million upon retirement. Story (Niall McGee and David Milstead, for subscribers)
CIBC shuffles top ranks to bolster U.S. business: Canadian Imperial Bank of Commerce has appointed Michael Capatides as the new chief executive of its U.S. business starting April 1, succeeding current head Larry Richman as he moves to a new role as chair. The change at the top of CIBC Bank USA speeds up a succession plan put in place when CIBC acquired the Chicago-based lender PrivateBancorp Inc. for US$5-billion last year, landing a cornerstone to expand CIBC’s presence in the United States. Story (James Bradshaw, for subscribers)
What Canada can learn from a damning report on Australia’s financial industry: It has taken 13 months, more than 10,000 submissions and six rounds of hearings, but several weeks ago the Australian Royal Commission into Misconduct in the Banking, Superannuation and the Financial Industry released its final report. The commission’s intent was to investigate alleged misconduct in banking and wealth-management services with a view to reinforcing honest and fair dealings between the Australian public and service providers. Opinion (Ian Russell, for subscribers)
Newmont says early joint-venture talks with Barrick ‘constructive’: Newmont Mining Corp says early joint venture (JV) talks with Barrick Gold Corp. have gone well. In an e-mail to The Globe and Mail, a Newmont spokesperson said the discussions were “constructive” and a “good starting point”. Story (Nial McGee)
Goldcorp rebuffed Randgold’s advances in 2017 because of political risk: Ian Telfer rebuffed Mark Bristow’s advances because he thought the fit between Randgold Resources Ltd. and Goldcorp Inc. was all wrong -- according to source familiar with the matter. Story (Niall McGee, for subscribers)
Pengrowth putting itself up for sale: Pengrowth Energy Corp. has put up a For Sale sign as the company seeks solutions for dealing with looming deadlines on its debt in a market where new borrowing is scarce. Story (Jeffrey Jones, for subscribers)
Barrick, Newmont work toward joint-venture deal: The chief executives of Barrick Gold Corp. and Newmont Mining Corp. are working to reach agreement on a critical joint-venture deal that could stave off a high-stakes takeover battle, but deep divisions remain between the world’s largest gold producers. Story (Niall McGee and Rachelle Younglai, for subscribers)
Hefty banking fees expected if Barrick succeeds in hostile bid for Newmont, estimates show: Former Citigroup banker Michael Klein is set for another big cheque if Barrick Gold Corp. succeeds in its US$17.8-billion hostile bid for Newmont Mining Corp. Mr. Klein’s advisory firm, M. Klein and Co LLC, has already reaped the rewards after serving as one of Barrick’s financial advisers on the Toronto-based miner’s US$6-billion purchase of Randgold Resources in January. Story (Rachelle Younglai, for subscribers)
Scotiabank launches partnership, leads investment in women-focused venture fund: The Bank of Nova Scotia is deepening its ties to the tech sector with an investment in and formal partnership with Disruption Ventures – moving the 10-month-old startup fund closer to becoming the largest private, independent, women-focused venture fund in Canada. Story (Josh O’Kane, for subscribers)
Toronto Real Estate Board joins calls for Ottawa to modify mortgage stress test amid falling home sales: The association representing Toronto real estate agents has added its voice to calls for the federal government to modify its new mortgage qualification rule as home sales fell in February from an already weak level last year. Garry Bhaura, president of the Toronto Real Estate Board (TREB), says the mortgage stress test introduced by Canada’s banking regulator is leaving some buyers on the sidelines as they struggle to qualify for a mortgage for the type of house they want to buy. Story (Janet McFarland, for subscribers)
Judge extends QuadrigaCX’s protection from creditors: A Nova Scotia Supreme Court Justice has granted the beleaguered cryptocurrency exchange QuadrigaCX more time to search for millions of dollars in missing assets. Justice Michael Wood added more than six weeks, to April 23, to a stay of proceedings that, since February, has blocked panicked creditors from suing Quadriga. Story (Jessica Leeder, for subscribers)
‘Snow-washing’: What leaked banking records show about Canada’s role in money laundering: Every year, billions of dollars obtained through corruption spin through the global economy – and Canadian-registered shell companies are a favoured mechanism for making that money clean. The Globe pored through documents obtained by a journalism non-profit to see how it works. Story (Mark MacKinnon, for subscribers)
Big banks lose market share after new mortgage rules implemented: Canada’s biggest banks lost market share in mortgage lending in Ontario last year after the federal government introduced its tougher new mortgage qualification rule. Teranet, which operates Ontario’s electronic land registry system, issued a report Monday saying the Big Five banks had 72.6 per cent of the Ontario market share by dollar value for new mortgages in 2018, a decline from 75.3 per cent in 2017. Story (Janet McFarland, for subscribers)
Barrick would consider dropping Newmont bid if joint venture talks successful: Barrick Gold Corp.’s chief executive officer says he is open to a joint venture with Newmont Mining Corp. to combine the companies’ Nevada operations instead of taking over the U.S. gold producer. On Monday, Newmont formally rejected Barrick Gold Corp.’s takeover offer, criticizing its “high risk” mine portfolio and its governance record, and calling out its new CEO, Mr. Bristow, for his inexperience in running a global mining company. Story (Niall McGee, for subscribers)
Newmont’s combative counterattack does not mean Barrick Gold is defeated: Barrick Gold’s lunge for Newmont Mining has officially gone hostile, extremely so, with Newmont formally rejecting the Canadian company’s US$17.8-billion offer and blasting its executive chairman, John Thornton, for shabby performance. But this is not the end of the story – don’t count Barrick out just yet. Opinion (Eric Reguly, for subscribers)
Onex taps ousted RBC executive Fleming for head of origination post: Onex Corp. has hired a former Royal Bank of Canada senior executive to help it expand a division that invests in higher-risk loans and debt securities. Onex, the Toronto-based private-equity firm with US$31-billion in assets under management, said it brought in Blair Fleming as head of origination at Onex Credit, to search for and evaluate middle-market type opportunities in the field. Story (Jeffrey Jones, for subscribers)
National Bank Financial’s head of technology investment banking leaving company: National Bank Financial’s head of technology, media and telecommunications investment banking is departing. After more than 20 years in the investment banking industry, Sanjiv Samant – head of technology, media, telecom, healthcare and sustainability banking – has decided to take some time off before pursuing other opportunities. Story (Alexandra Posadzki, for subscribers)
Cambridge cybersecurity firm raises US$47-million for hiring, automation: Cambridge, Ont., cybersecurity company eSentire Inc. has raised US$47-million from existing investors including New York private-equity giant Warburg Pincus LLC. The fundraising round is the company’s first since Warburg became eSentire’s majority owner a year and a half ago. Story (Josh O’Kane, for subscribers)
Lawyers for affected Quadriga users say appointment of restructuring officer should be delayed: Lawyers for the users of Canadian cryptocurrency exchange QuadrigaCX say the court should delay appointing a chief restructuring officer. Quadriga was granted creditor protection last month after the death of its chief executive, Gerald Cotten. Story (Alexandra Posadzki, for subscribers)
Investors cheer as Power Corp and its entities buy back shares: Power Corp. of Canada and two of its publicly traded entities announced that they will buy back a massive swath of their own shares, sending share prices higher but raising the question of what the announcement means for future acquisitions. Power Corp., a holding company that has a 65.5 per cent stake in Power Financial Corp., will repurchase as much as $1.35-billion worth of its own shares, representing about 10 per cent of the current value of the company. Power Financial will repurchase up to $1.65-billion worth of its own shares, and Great-West Lifeco Inc., a subsidiary of Power Financial, will buy back up to $2-billion worth of its shares. Story (David Berman, for subscribers)
Silicon Valley Bank to set up shop in Canada: Canada’s banking regulator has granted Silicon Valley Bank a licence to operate in the country, clearing the way for the California-based lender to solicit business and lend to technology and life sciences companies north of the border. The Santa Clara-based bank, also known as SVB, has US$57-billion in assets and caters to high-tech and life sciences companies from early-stage startups to more mature businesses. Story (James Bradshaw, for subscribers)
You shouldn’t need to be a man to get venture capital funding in Canada: Think everyone with a great idea gets a fair shake in the world of venture capital? Think again. According to new data, companies founded by women received just 2.2 per cent of the venture capital money invested in the United States in 2018. That’s down from the 2.5-per-cent level reported for 2017. Opinion (Arlene Dickinson)
Will Hydro One become Ford’s version of Ontario’s gas plant scandal?: Former Ontario premier Dalton McGuinty’s reputation was tarnished by his government’s mishandling of the province’s electricity market. His politically motivated decision to cancel development of two gas-fired power plants turned into a $1.1-billion boondoggle. Opinion (Andrew Willis, for subscribers)
IN CASE YOU MISSED IT: BIG DEALS OF 2018
Here is the Report on Business annual Big Deals package of stories and tables about financing and investment banking:
Canadian cannabis deal makers shift their focus away from domestic acquisitions: The deal flow in the cannabis industry has shifted dramatically in the past year, thanks to Constellation Brands Inc.’s $5-billion investment in Canopy Growth Corp. and Altria Group Inc.’s $2.4-billion investment in Cronos Group Inc. Cannabis deal makers are now focusing on consumer packaged goods partnerships and international acquisitions, while fewer large Canadian cannabis producers seem interested in acquiring one another. Story (Mark Rendell and Alexandra Posadzki, for subscribers)
Rush of gold mining M&A reflects a return to ‘bigger is better’ thinking: The world’s biggest gold miners have done a 180. After the failure of past blockbuster mining deals, such as Barrick Gold Corp.’s $7.3-billion purchase of copper producer Equinox Minerals Ltd. in 2011, the industry mostly abandoned size as a measure of success, in favour of profitability. Over the past seven years, Barrick and others preached the gospel of the need to generate free cash flow, rather than increase production. But all of a sudden, the “bigger is better” mantra is back. Story (Niall McGee, for subscribers)
Big Law is back: Relief on Bay Street as corporate lawyers thrive: At the highest echelons of corporate law, the existential crisis has abated. Big Law is back – and in some ways, it’s doing better than ever. After several years of soul-searching, an era that included the collapse of Heenan Blaikie, a prominent Canadian shop, many of the largest corporate law firms such as Osler, Hoskin & Harcourt LLP and Torys LLP had banner years in 2018, although exact figures for revenue and profit are closely held, because law firms are privately owned. Story (Tim Kiladze, for subscribers)
Hostile takeovers in the oil patch complicated by extended deadlines, gyrating prices: In the oil patch, takeover deals are happening in slow motion. In some cases, that’s why they aren’t happening at all. Two recent takeover attempts stood out for surprise endings. The outcomes of both were influenced heavily by gyrations in Canadian oil and gas prices as deal-making efforts dragged on for months. Story (Jeffrey Jones, for subscribers)
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