Here are the top reads on deals and financial services over the week. Have a great weekend:
Barrick, Newmont jockeying to win over shareholders in hostile bid battle: The courtship of Newmont Mining Corp. shareholders has begun. This week, the world’s two biggest gold companies launched duelling campaigns in an attempt to convince Newmont shareholders of the merits of two very different takeover deals – either of which would change the makeup of the global gold industry. Story (Niall McGee, for subscribers)
Ernst & Young still can’t find missing Quadriga funds: The court-appointed monitor overseeing the hunt for $250-million in cash and cryptocurrency owed to users of QuadrigaCX says it has contacted numerous exchanges and payment processors for information, but has so far retrieved little additional funds. Four exchanges responded and some confirmed the existence of relevant accounts. One exchange held “minimal cryptocurrency” on behalf of Quadriga. Story (Joe Castaldo and Alexandra Posadzk, for subscribers)
Quadriga co-founder Michael Patryn a U.S. felon, documents show: The co-founder of troubled cryptocurrency exchange QuadrigaCX is a convicted felon who served time in the United States for his role in an online identity-theft ring. Story (Joe Castaldo and Alexandra Posadzki, for subscribers)
TD, CIBC hoping to shrug off choppy first-quarter earnings: Canada’s major banks are hoping to shrug off a choppy first quarter after volatile financial markets hurt profitability to start fiscal 2019. Toronto-Dominion Bank and Canadian Imperial Bank of Commerce wrapped up the quarterly earnings season for major lenders on Thursday with dividend increases, but also posted weaker-than-expected profits. Like their peers, both banks suffered from sluggish results in capital markets and wealth management during the November-to-January quarter and had to build up provisions to cover possible loan losses, despite better results from retail banking. Story (James Bradshaw, for subscribers)
Exercise caution if betting on Laurentian: Laurentian Bank of Canada is a small bank but a big target for short-sellers, who are convinced that a downturn in the Canadian housing market will deliver severe pain. Now may not be the best time to bet against these naysayers. Story (David Berman, for subscribers)
Hong Kong tycoon, two equity firms bid on Anbang Insurance’s Vancouver office complex, sources say: Hong Kong tycoon Li Ka-shing’s company and two private equity firms have made preliminary bids for Anbang Insurance Group’s office complex in Vancouver, according to people familiar with the matter. Mr. Li’s CK Asset Holdings Ltd., U.S. private equity firm Blackstone Group and Canadian real estate firm KingSett Capital have expressed interest in four office towers called Bentall Centre, said the sources, who were granted anonymity by The Globe and Mail because they were not authorized to speak publicly. Story (Rachelle Younglai, for subscribers)
TD, CIBC boost dividends but profits hurt by weaker capital markets: Toronto-Dominion Bank and Canadian Imperial Bank of Commerce, two of Canada’s biggest lenders, reported first-quarter earnings on Thursday that fell short of analysts’ forecasts, hurt by weakness in their capital markets businesses. Profit at TD, Canada’s second-biggest lender, was hurt by losses at its wholesale banking division while CIBC, the country’s fifth-biggest lender, saw earnings decline in personal and small-business banking as well as capital markets. Story
Ontario regulator pays whistle-blowers $7.5-million, a first for Canada: The Ontario Securities Commission has paid three whistle-blowers a total of $7.5-million, marking the first payments of their kind in Canada. The payments, made in three separate cases, were given to people who, the OSC said, “voluntarily provided high quality, timely, specific and credible information” that helped the regulators with enforcement actions. Story (Tim Kiladze and David Milstead, for subscribers)
National Bank’s financial markets unit hinders first-quarter results: Volatile financial markets sapped the strength from an otherwise solid first quarter at National Bank of Canada. Profit and revenue for the country’s sixth-largest bank were effectively flat compared with a year ago, as a 17-per-cent decline in profit from the financial-markets arm offset gains in all other key divisions. Story (James Bradshaw, for subscribers)
Cogeco Communications selling cloud services provider for $720-million: Barely six years after it gambled half a billion dollars on cloud services, Cogeco Communications Inc. has signed a deal to hand over struggling Cogeco Peer 1 Inc. to an investment firm. Digital Colony, based in Los Angeles, will buy the cloud services provider for $720-million, Cogeco Communications said Wednesday. Story (for subscribers)
Why a Barrick takeover of Newmont would do little for gold investors: Many people have described Barrick Gold Corp.’s hostile takeover offer for Newmont Mining Corp. as audacious. A better word might be “unnecessary.” Unnecessary, that is, from an investor’s perspective. Story (Ian McGugan, for subscribers)
International banking expansion helps BMO and Scotiabank push through volatile first quarter: Robust expansion in international banking helped two of Canada’s largest banks battle through volatility in financial markets in the first fiscal quarter, offsetting difficult conditions for capital markets and wealth management. In a challenging quarter, Bank of Nova Scotia posted a 17-per-cent rise in profit from international banking, compared with a year earlier. But a 4-per-cent decline in overall year-over-year profit still disappointed investors as the bank grapples with higher expenses while juggling a string of recent acquisitions and divestitures across a number of countries. By contrast, Bank of Montreal impressed Bay Street, boosting adjusted profit for the quarter that ended Jan. 31 by 8 per cent. Story (James Bradshaw, for subscribers)
The 10 top-performing Canadian equity analysts – and their stock picks for 2019: With thousands of analyst recommendations published every day, the key question for investors is: how do you know who to trust? TipRanks is a website that tracks and ranks analyst recommendations. Investors can skip recommendations from underperforming analysts, and focus exclusively on best-performing analysts with a proven track record of success. Using this data, TipRanks has now published a list of the best-performing Canada-focused stock pickers right now. Story (for subscribers)
Board appointments of women drop to lowest number in five years: The proportion of women appointed to Canadian corporate boards in 2018 fell sharply to the lowest figure in five years, raising the question of whether the drive to increase gender diversity at the director level has stalled. Story (David Milstead, for subscribers)
Battle of the banks: Head offices reach for the skies: The Big Six banks occupy some of Canada’s most iconic towers, but they’re not content to maintain the status quo - many are moving their headquarters or expanding into new signature spaces. Story
War of words breaks out as Barrick Gold launches hostile bid for Newmont Mining: Barrick Gold Corp. launched a hostile US$17.8-billion takeover bid for Newmont Mining Corp., sparking a war of words between the world’s two biggest gold miners. Story (Niall McGee and Rachelle Younglai, for subscribers)
Why Barrick’s hostile bid is so unusual – and so tricky to pull off: It feels very familiar. For the second time in eight years, Barrick Gold Corp. is angling to break up somebody else’s big deal. This time, the odds aren’t on its side. Story (Tim Kiladze, for subscribers)
Bristow looks eager to be the gold sector’s disruptive force, whether it needs one or not: Barrick Gold Corp. has plenty to gain both financially and operationally by absorbing Newmont Mining Corp. and creating far and away the largest gold-mining company in the world. The benefits for Newmont and its investors from bowing to a US$19-billion all-stock offer aren’t so clear. Story (Jeffrey Jones, for subscribers)
Barrick’s promises of golden synergies won’t be enough to snag Newmont: On Monday morning, John Thornton, Barrick’s executive chairman, and CEO Mark Bristow unveiled a nil-premium, all-share offer for Colorado’s Newmont Mining. Hostile offers generally come with juicy premiums or else they don’t work, and this bid is already not working. Opinion (Eric Reguly, for subscribers)
Canaccord’s head of research Dvai Ghose set to retire in March: A changing of the guard is coming in the research team at Canaccord Genuity Group Inc. as long-time telecom analyst and department head Dvai Ghose steps down at the end of March and cannabis analyst Derek Dley becomes head of the investment bank’s Canadian research group. Story (Andrew Willis, for subscribers)
Montreal biotech startup Clementia Pharmaceuticals agrees to US$1-billion takeover bid: Clementia Pharmaceuticals Inc., one of Canada’s leading biotech startups, has agreed to a takeover by Paris-based Ipsen for US$1.04-billion, a year before its lead drug is expected to reach the market. Ipsen agreed to pay US$25 a share in cash for the Nasdaq-listed company, an amount that could rise by US$6 a share to a total deal size of US$1.3-billion if the drug receives approval for a second application. Story (Sean Silcoff, for subscribers)
National Bank returning to its roots on historic Montreal street: Before there was Bay Street, there was St. James Street. For nearly a century, this Montreal thoroughfare – now known as Saint-Jacques Street – was the heart of Canadian finance, until the spectre of Quebec sovereignty and the rise of Toronto knocked the city into also-ran status. But late last year, National Bank of Canada broke ground on a 40-storey, $500-million highrise, right here on the same street where it was headquartered a century ago. Story
OMERS posts 2.3 per cent return in 2018 as investments offset tough market: OMERS, the Ontario Municipal Employees Retirement System, posted a 2.3-per-cent return in 2018 as the fund’s private investments offset its losses in the stock market. OMERS has about $50-billion, or roughly half, of its portfolio in private investments – private equity, infrastructure and real estate. The category returned 10.7 per cent in the aggregate, with private equity returning 13.5 per cent. Story (David Milstead, for subscribers)
Canadian pension funds buy cannabis stocks: Canadian pension funds – some of the biggest and most august of investors – are buying pot stocks as the maturing industry’s largest companies emerge as mainstream investment options in the wake of the legalization of recreational cannabis. The Public Sector Pension Investment Board (PSP Investments) bought shares of four different cannabis companies in 2018’s fourth quarter. Story (David Milstead and Mark Rendell, for subscribers)
Rosenberg: This is my biggest conviction about markets right now (and dividend and bank investors will like it): I have to make this point and make it emphatically – central banks continue to matter and maybe now more than ever. Those of us that have been cautious on the markets have rightly said, time and again, in this two-month bounce-back that prices have begun to reflect a whole lot of potential good news – from a successful resolution to the trade file, to Chinese stimulus to a Brexit solution. Opinion (David Rosenberg, for subscribers)
MORE MORE DEALS NEWS FROM FRIDAY
Private equity: Asset manager Brookfield Asset Management Inc is looking for additional targets in Brazil after a recent wave of acquisitions, including Sao Paulo state sanitation company Sabesp, a source familiar with the plans told Reuters. Story (for subscribers)
IPO: Lyft Inc. inched closer to becoming the first ride-hailing company to make a stock market debut by releasing its filing for an initial public offering on Friday, revealing to the public a detailed look at its financial performance. Story
Layoffs: The new boss of the London Stock Exchange Group Plc announced a round of job cuts on Friday as the bourse prepares for Brexit after delivering annual results that met expectations. Story
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