The cannabis industry faces a raft of stiff regulatory and financial hurdles even where it’s operating legally.Dave Chan/The Globe and Mail
Investors sent shares of cannabis companies with U.S. exposure tumbling on Thursday after learning that Canada's only clearinghouse for equities is considering a move that could disrupt trading of those stocks. Story (subscribers)
A company owned by Canada's major stock-exchange operator is considering a move that would make it difficult for investors to trade the shares of cannabis companies with U.S. assets, potentially disrupting the flow of millions of dollars into the burgeoning marijuana industry. Story (subscribers)
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At some point, someone tries to take things just too far, and all hell breaks loose. This is what happened when Snap Inc., owner of the Snapchat messaging app, went public earlier this year in the United States with shares that gave investors no vote at all on virtually all corporate matters. The backlash was swift, and fierce, with major institutional investors asking the companies that create the major stock indexes to keep companies such as Snap, which disenfranchise their stockholders, out of the indexes. Story (subscribers)
Activist investor Jonathan Litt, who is pushing for retailer Hudson's Bay Co. to boost its stock by generating more cash from its real-estate holdings, said he is open to letting the retailer come up with its own strategy to unlock value. Story
ELSEWHERE IN FINANCE
Executives at Home Capital Group Inc. say they are entering a new phase in the company's recovery, promising to gradually turn on the taps and increase the flow of new loans it is underwriting. Story
DEALS
Aldo, the privately held Canadian shoe company, has agreed to acquire the footwear and accessories operations of the Camuto Group, the company founded by the fashion impresario Vince Camuto, who died in 2015. Story
German train maker Siemens AG is tempering expectations of an imminent deal with Bombardier Inc. to combine their rail businesses, saying it is "not in a hurry" to strike an agreement that would challenge industry colossus CRRC Corp. Story
Canada Pension Plan Investment Board has partnered with Allianz Capital Partners to buy a minority equity interest in the Spanish gas distribution business of Gas Natural Fenosa. PE Hub
FROM THE ANALYSTS
Canada's biggest tech companies are increasing their internal mergers and acquisitions capabilities. Constellation, Canada's second-largest tech company by market capitalization, recently said it has doubled the size of its internal M&A team to 60 people and plans to keep increasing it to about 80 people. Open Text Corp., the fourth largest by market cap, is also committing more resources to M&A, saying it has quadrupled the size of its internal team now stands at 20.
CGI Group Inc. has also expanded its internal M&A team and has a large target list.
"CGI has stayed true to its proven formula of buying the "right acquisition" at the "right price" at the "right time"," said Echelon Wealth Partners analyst Ralph Garcea, in a research note. "There are still many opportunities in the fragmented IT services industry as CGI has identified 5,000+ companies in its M&A funnel – with combined revenue of US$200B+. CGI will continue to do small tuck-in deals of local and IP-based services firms (Toronto-based JSL (private), France-based Alcyane (private), and Boston-based Collaborative Consulting (private)), while patiently waiting for the next transformational deal (after AMS, Stanley, and Logica). CGI paid about US$90-million/C$125-million for CTS and ECSTeam (adding about US$72-million/C$100-million in revs)."
IN CASE YOU MISSED IT
Speaking of tech companies, Tobi Lutke, the chief executive of Shopify Inc., Canada's third-largest tech company by market cap, has this to say about his company doing M&A. Story (subscribers)
WHAT WE'RE READING
Funds of hedge funds may actually be pretty good at picking manager, but just are not good enough to overcome the additional fees they charge. Institutional Investor
Royal Bank of Canada customers are now able to ask Siri to pay their bills via voice commands with the iPhone and iPad – a first in Canada, according to the financial institution. Betakit
The SoftBank Vision Fund has been making headline after headline since plans for the massive vehicle were announced last October, mostly due to its sheer size: The fund held its first close on $93-billion (U.S.) in May and could total up to $100-billion when all is said and done. Pitchbook