Tausi Insider

Brookfield CEO Bruce Flatt attends the company's AGM in Toronto in this file photo. Chris Young/The Canadian Press Brookfield Asset Management Inc.’s BAM-A-T third-quarter profit fell 74 per cent as interest costs surged and deal activity slowed, but the company continued to raise funds at a record pace and is flush with cash to pursue new investments. Chief executive officer Bruce Flatt said in a letter to shareholders that the “dislocation” in financial markets in an environment of rapidly rising interest rates has made it harder for many companies seeking financing to access capital, which has slowed the flow of deals. Interest rates could peak in the next six months and should “slowly come down” as inflation abates, he said, but many of the world’s major economies look like they “will experience a recession.” As capital grows increasingly scarce, however, Brookfield looks to be in an advantageous position to make deals after booking capital inflows of US$33-billion in the th...

“Post-IPO, our Canadian business will trade exclusively on the Toronto Stock Exchange, and our U.S. business will trade exclusively on a U.S. exchange,” said CEO Kurt MacAlpine, seen here on Dec. 20, 2019. Tijana Martin/Tausi Insider CI Financial Corp. says it plans to file for a stock offering for its U.S. wealth-management business later this month, the next step in a plan to divide the company into two businesses, one on each side of the border. The plan includes delisting the current company’s shares from the New York Stock Exchange, chief executive officer Kurt MacAlpine told CI investors Thursday as part of the company’s earnings call. “Post-IPO, our Canadian business will trade exclusively on the Toronto Stock Exchange, and our U.S. business will trade exclusively on a U.S. exchange,” Mr. MacAlpine said. “The listings will be reflective of the primary market that each business operates in.” CI said the plan also may include selling a larger proportion of the U.S. business th...

The Rio Tinto Fer et Titane (RTFT) plant is seen in Sorel, Quebec, Canada October 11, 2022. CHRISTINNE MUSCHI/Reuters The head of a hedge fund who complained to Quebec’s security regulator about Rio Tinto PLC’s preferential back door deal with two dissident shareholders pertaining to its pending takeover of Turquoise Hill Resources says he feels vindicated the giant miner has been forced to offer all minority shareholders the same deal. “The Quebec securities regulator, and any other regulator that was involved, should pat themselves on the back for a job well done,” Jeff Banfield, partner with Caravel Capital Investments Inc. said in an interview. “You literally saw a one hundred billion mining behemoth go, ‘Okay, okay, don’t get upset.” Last week, Turquoise Hill said that Quebec’s l’Autorité des marchés financier had “public interest concerns” about the preferential deal it negotiated with Pentwater Capital Management LP and SailingStone Capital Partners LLC, under which the pair w...

Dentalcorp Holdings Ltd. DNTL-T, Canada’s largest consolidator of dental clinics, is considering selling itself just a year and a half after setting a record for an initial public offering of a health care company. Dentalcorp announced Monday its board had launched a strategic review to assess its options to “unlock shareholder value.” The company raised $700-million in an IPO on the Toronto Stock Exchange in May of 2021. At the time it was the biggest IPO for a life-sciences company on the TSX, though it was overtaken a year later by eyecare-product maker Bausch + Lomb Corp. Inside the corporate dash to buy up dentists’ offices, veterinary clinics and pharmacies Dentalcorp’s stock made its debut at $14 a share and climbed as high as $18.36, but has since been in free fall, hitting as low as $5.65 last week. The shares rallied 32 per cent on Monday’s news to reach $8 at day’s close. Chief executive officer Graham Rosenberg said in a news release that the company’s strategic review wa...

The Ontario government is down to a short list of candidates to chair the provincial securities regulator, with two veteran financial executives among those in the running to lead the recently restructured agency. Two current Ontario Securities Commission directors, Cindy Tripp and Kevan Cowan, are the front-runners to become the next chair of Canada’s largest market regulator, according to six Bay Street sources close to the agency. Tausi Insider is not naming these sources because they were not authorized to speak publicly about the appointment process. Ontario Finance Minister Peter Bethlenfalvy is expected to announce the new OSC chair in the next week or two, according to a government spokesperson. Heather Zordel resigned as chair in late October after seven months in the role. Her brief tenure created a stir within the regulator, with two part-time commissioners resigning in protest over her appointment. The two leading candidates to head the OSC’s board both have experience in...

Brad Shaw, the CEO and executive chair of Shaw Communications Inc., appears before a CRTC hearing in Gatineau, Que., on Nov. 22, 2021. Dave Chan/Tausi Insider A Competition Bureau lawyer grilled Brad Shaw, the CEO and executive chair of Shaw Communications Inc., SJR-B-T about the roughly $2.3-billion his family stands to receive if their company is successfully acquired by Rogers Communications Inc. RCI-B-T Mr. Shaw told the Competition Tribunal on Wednesday that his family made the “extremely difficult” decision to sell the business they had run for 50 years to Rogers for $26-billion because it was the right thing to do for all of the company’s shareholders and other stakeholders, including its customers and its employees. The company was losing market share to Telus in its internet and TV business, had not recouped the billions it had poured into its wireless division, and didn’t have the scale to make the investments needed to remain competitive, Mr. Shaw said. The Shaw family con...

Valuations and deal volumes and sizes hit their highest levels in years in 2021. Nathan Denette/The Canadian Press Venture capital investment in Canada has collapsed to its lowest quarterly level since the early days of the pandemic as economic conditions continue to deteriorate and companies seeking investment struggle to find a meeting point on prices with financiers. The Canadian Venture Capital and Private Equity Association of Canada, or CVCA, said Thursday that companies raised $896-million across 144 deals in the third quarter. That’s down 50 per cent by value and 25 per cent in deal volume from the second quarter – and off 78 per cent in deal value from the third quarter last year. This year will still rank as one of the biggest on record for VC financing in Canada, although many of those deals were actually reached last year and only announced in 2022. Valuations and deal volumes and sizes hit their highest levels in years in 2021, and global investors such as Tiger Global M...

The Toronto Stock Exchange is looking for candidates for initial public offerings (IPOs) in Canada among mid-sized Brazilian companies, the bourse’s chief executive Loui Anastasopoulos said after a week-long visit to the country. Anastasopoulos said the targets are mainly in mining, renewable energy and technology, areas favoured by Canadian investors. Some could use the TSX Venture Exchange, tailored for startups, he added. The most successful example of a company that raised capital in Canada in its initial stages is Sygma Lithium Corp, a lithium miner operating in the Minas Gerais Brazilian state. Its 2018 IPO in TSX Venture Exchange valued the company, focused on selling the mineral to car battery makers, at around $90-million. Currently listed also in Nasdaq, Sigma now has a $4.4-billion market capitalization. “That is a solution for mid-sized companies that need to raise capital in small transactions that are difficult to accomplish in local capital markets”, Anastasopoulos sai...

The Ontario government has tapped Kevan Cowan to serve as chair of the province’s securities regulator after the unexpected departure of its last chair, Heather Zordel. Mr. Cowan most recently served as the chief executive officer of the Capital Markets Authority Implementation Organization, the latest attempt by a collection of provinces at establishing a pan-Canadian securities regulator. A lawyer, Mr. Cowan also served on an advisory panel to Ontario’s Capital Markets Modernization Task Force, which proposed a series of recommendations in 2021 that brought about sweeping structural changes to the Ontario Securities Commission. The Globe reported last week that Mr. Cowan and Cindy Tripp, who co-founded investment bank GMP Securities LP in 1995 and served on the modernization task force, were the front-runners for the position. Both are currently directors at the OSC. The chair position was left vacant because of the unexpected resignation of Ms. Zordel, the government’s last pick f...

Bank towers are shown from Bay Street in Toronto's financial district. Adrien Veczan/The Canadian Press Canada’s major banks wrapped up their fiscal year on an uneasy note, with a boost to profit margins from rising interest rates offset by inflated costs and gradual increases in loan losses as customers start to feel the strain from higher borrowing costs. Five of the six largest lenders reported fiscal fourth-quarter profits that were flat or lower than a year ago, and three of them – Bank of Montreal, BMO-T Canadian Imperial Bank of Commerce CM-T and National Bank of Canada NA-T – fell short of analysts’ earnings estimates. The outlier was Toronto-Dominion Bank, TD-N a lender that is rich in deposits and posted large increases in the margins it earned on loans – the difference between what it charges borrowers and pays on deposits. That helped drive retail banking revenues higher. In the 2023 fiscal year, banks are expecting to be dealt a tougher economic hand. Several bank CE...

Bank towers are shown from Bay Street in Toronto's financial district. Adrien Veczan/The Canadian Press Canada’s major banks wrapped up their fiscal year on an uneasy note, with a boost to profit margins from rising interest rates offset by inflated costs and gradual increases in loan losses as customers start to feel the strain from higher borrowing costs. Five of the six largest lenders reported fiscal fourth-quarter profits that were flat or lower than a year ago, and three of them – Bank of Montreal, BMO-T Canadian Imperial Bank of Commerce CM-T and National Bank of Canada NA-T – fell short of analysts’ earnings estimates. The outlier was Toronto-Dominion Bank, TD-N a lender that is rich in deposits and posted large increases in the margins it earned on loans – the difference between what it charges borrowers and pays on deposits. That helped drive retail banking revenues higher. In the 2023 fiscal year, banks are expecting to be dealt a tougher economic hand. Several bank CE...

Bank towers are shown from Bay Street in Toronto's financial district. Adrien Veczan/The Canadian Press Canada’s major banks wrapped up their fiscal year on an uneasy note, with a boost to profit margins from rising interest rates offset by inflated costs and gradual increases in loan losses as customers start to feel the strain from higher borrowing costs. Five of the six largest lenders reported fiscal fourth-quarter profits that were flat or lower than a year ago, and three of them – Bank of Montreal, BMO-T Canadian Imperial Bank of Commerce CM-T and National Bank of Canada NA-T – fell short of analysts’ earnings estimates. The outlier was Toronto-Dominion Bank, TD-N a lender that is rich in deposits and posted large increases in the margins it earned on loans – the difference between what it charges borrowers and pays on deposits. That helped drive retail banking revenues higher. In the 2023 fiscal year, banks are expecting to be dealt a tougher economic hand. Several bank CE...

The Liberal government’s proposed tax on stock buybacks is going to be expensive for a number of Canadian companies. Unfortunately, investors can’t be sure of which ones, and by how much. The reason – and I know this will shock you – is that Canadian disclosure requirements for companies’ buyback activity have lagged U.S. rules for nearly 20 years. And the Securities and Exchange Commission (SEC) would like to expand what companies there reveal, which threatens to widen the information gap with Canada. To review, the government said earlier last month it plans to introduce a 2-per-cent tax on share buybacks starting in 2024. The idea is ripped off from the United States, which in August brought in a 1-per-cent tax on stock buybacks, starting in 2023. A lot of the discussion of the proposal is black-and-white: The Liberal government clearly sees buybacks as a diversion of capital from job-creating investment; business groups have said the buybacks are a legitimate capital-management t...

Canada’s banking regulator has raised the ceiling on bank capital levels and ramped up the reserves the country’s largest banks must hold, citing rising risks posed by inflation, interest-rate hikes and household debt as reasons to expand a financial safety net designed to guard against economic shocks. The Office of the Superintendent of Financial Institutions (OSFI) increased the maximum level of the domestic stability buffer Thursday. The DSB, which will now range from 0 to 4 per cent of a bank’s risk-weighted assets, is a store of capital built up in good times to be used to soften the blow when conditions turn sour. OSFI also announced that it will set the buffer higher on Feb. 1, 2023, raising it to 3 per cent from its current level of 2.5 per cent, which had been the top end of the DSB’s range since it was formally created in 2018. By requiring banks to hold more capital when business is good and credit losses are low, OSFI is building a surplus that it can then release when b...