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...

Ireland’s Supreme Court ruled on Friday that parliament cannot ratify the European Union’s free trade deal with Canada unless laws are changed, posing a challenge to the coalition government if it wants to avoid the matter going to a referendum. The Comprehensive Economic and Trade Agreement (CETA) sets out the removal of tariffs on 99 per cent of all goods types traded between the EU and Canada, some over a period of up to seven years. It has been provisionally in force since September 2017, and has so far been ratified by 16 of the 27 EU member countries, with Germany’s coalition agreeing in June to add its signature. The Irish government had intended to do so as well through a vote in parliament once it cleared the legal hurdles. Deputy Prime Minister Leo Varadkar said last year that a delay would send out the wrong message on Ireland’s commitment to trade. However a member of the ruling coalition challenged it in the courts, arguing that the deal should be put to a referendum bec...

Oil and gas producers Canada and Nigeria have become the latest countries to tackle the potent greenhouse gas methane with laws to rein in emissions in the fossil fuel energy sector. The announcements came as the United States on Friday said it would expand its own rules to require oil and gas drillers to find and fix leaks of methane at all of the country’s well sites. Methane has more than 80 times the planet-warming potency of CO2 in its first 20 years, but breaks down faster in the atmosphere, making it a high value target for near-term efforts to slow climate change. Canada said its new rules would target a 75% cut in methane emissions from the oil and gas sector by 2030, including through a proposed monthly requirement for oil and gas companies to find and fix methane leaks in their infrastructure. “It’s kind of a big deal for us, we are the fourth biggest producer of oil and gas. So we have a big responsibility, but it’s also a big challenge,” Canadian Environment Minister Ste...

Canadian crypto exchange Bitvo said on Tuesday it had terminated its deal to be bought by FTX, which filed for bankruptcy last week. Bitvo also said it had no material exposure to FTX or any of its affiliates. https://www.tausiinsider.com/canadas-bitvo-ends-acquisition-deal-with-bankrupt-crypto-exchange-ftx/?feed_id=371666&_unique_id=648ecb7fefce7

A fisherman on a boat as a power plant emits smoke in the background in Jakarta, Indonesia. Irwin Fedriansyah/The Associated Press Indonesia signed deals with international lenders and major nations on Tuesday that will bring billions of dollars in funding to help the country increase its use of renewable energy and reduce its reliance on coal. The $20-billion agreement was announced on the sidelines of the Group of 20 summit in Bali, Indonesia. Called a Just Energy Transition Partnership, or JETP, it is meant to help developing countries reduce their reliance on fossil fuels such as coal and gas that cause carbon emissions that contribute to climate change. It’s an important step for Indonesia, a major exporter of coal that has abundant potential for developing cleaner energy. “In today’s world, climate change is a global emergency,” said Luhut Binsar Pandajaitan, Indonesia’s co-ordinating minister of maritime and investment affairs. “Indonesia has an important role to play in avoid...

Collapsed-crypto exchange FTX outlined a “severe liquidity crisis” in U.S. bankruptcy filings, which said the group could have more than 1 million creditors, as regulators opened investigations and lawmakers called for clearer rules on how the industry operates. FTX’s filing to a U.S. bankruptcy court, published late on Monday in the United States, said it was in contact with financial regulators and had appointed five new independent directors at each of its main companies, including its sibling trading firm Alameda Research. The exchange, which had been among the world’s largest, filed for bankruptcy protection on Friday in one of the highest-profile crypto blowups after panicked traders withdrew $6-billion from the platform in just 72 hours and rival exchange Binance abandoned a rescue deal. “FTX faced a severe liquidity crisis that necessitated the filing of these cases on an emergency basis last Friday,” the court filing stated. “Questions arose about Mr. Bankman-Fried’s leaders...

Seven-time Super Bowl champion Tom Brady and his former wife, Gisele Bündchen, closed an equity deal with FTX in June, 2021. The Associated Press FTX Ltd., the world’s second largest crypto company, was seen as a trustworthy, stable bet in the industry. Its near-collapse is having ripple effects through the crypto sector at alarming speed, with the price of Bitcoin and Ether plummeting more than 20 per cent over a week. The FTX crash is not only bad news for its founder, Sam Bankman-Fried, who likely lost billions of dollars, it’s also devastating for many investors. Mr. Bankman-Fried was close to U.S. lawmakers, and managed to court celebrities and sophisticated institutional investment managers to back his exchange. Beyond investors, FTX built an impressive portfolio of partners and ambassadors, many of whom were paid in stakes in the company. With the crypto company’s collapse, many sponsorships and partnerships are up in the air. Here’s a list of some of the people Mr. Bankman-Fr...

Deal making activity slowed further in Canada during the third quarter, continuing a downtrend trend driven by rising interest rates and volatile market conditions, though experts are counting on a rebound in 2023. A total of 684 merger and acquisition transactions were announced between the start of July and the end of September, according to the latest Canadian M&A report from specialty investment bank Crosbie & Co. released Wednesday, representing the third straight quarterly decline. Transactions fell by one-third from the recent high achieved in the first quarter of 2021, when more than 1,000 deals were announced, although the latest decline in transactions was offset by several mega-deals worth more than $1-billion. Aggregate deal value increased to $63-billion in the third quarter, up 16 per cent from the second quarter, largely as a result of 14 mega-deals announced during the latest period. Fully one-third of that total came from just two transactions: refining giant...

Rio Tinto PLC has been unable to reach an agreement with Turquoise Hill Resources Ltd. about how to balance the preferential treatment it is extending to one set of minority shareholders over the rest in a multibillion-dollar takeover, and it has decided to revert back to its original takeover deal terms. Last week, Turquoise Hill said it was indefinitely postponing the shareholder vote on the proposed $4.2-billion takeover of the company by Rio Tinto as Quebec’s top securities regulator, the Autorité des marchés financier (AMF), studies whether a backdoor deal Rio cut with dissident shareholders is legal. Rio earlier reached an agreement with Pentwater Capital Management LP and SailingStone Capital Partners LLC, under which the two U.S. investors would be paid out 80 per cent of the $43-a-share takeover amount being offered to all Turquoise Hill shareholders and, after a ruling from an arbitrator, the remaining 20 per cent, plus interest, and potentially much more. The arrangement c...

Book-publishing powerhouse Simon & Schuster will let its $2.2 billion sale to Penguin Random House collapse on Monday, opening the door for a new suitor to try to clinch a deal, according to people familiar with the matter. The acquisition was blocked on Nov. 1 by a federal judge on antitrust grounds. Penguin was unable to convince Simon & Schuster to launch an appeal and extend their deal contract before it expires on Monday, the sources said. Penguin will owe Simon & Schuster a $200 million breakup fee as a result of the transaction falling apart. The sources requested anonymity ahead of official announcements this week. Bertelsmann and Paramount did not respond to requests for comment. The U.S. Justice Department had sued to stop the tie-up of the two publishers, which combined would have accounted for more than 25% of all print books sold in the United States this year. In its complaint it argued the deal would lead to lower earnings for authors because of the reduced...

Home Capital Group Inc. HCG-T has signed deal to be acquired by Smith Financial Corp. that values the company at $1.7-billion. More to come. https://www.tausiinsider.com/home-capital-signs-deal-to-be-acquired-by-smith-financial/?feed_id=333477&_unique_id=647fa6440a617

New Brunswick seafood giant Cooke Inc. says it has completed a C$1.5-billion acquisition of Australian seafood producer Tassal Group Ltd. The parent company of Cooke Aquaculture Inc. says the deal is the largest-ever purchase for the family-owned company since its launch in 1985. Cooke says it acquired all outstanding shares of Tassal for A$5.23 per share following approval by Tassal shareholders and an Australian court. Cooke CEO Glenn Cooke says the company is thrilled to join the Tasmanian aquaculture industry and welcomed Tassal’s 1,700 employees. Tassal harvests 40,000 tonnes of Atlantic salmon annually in five marine farming zones with four land-based freshwater hatcheries and four processing facilities from southern Tasmania to the north of Queensland. It also farms 5,500 tonnes of Australian black tiger prawns from two hatcheries, three pond farms and processing facilities. https://www.tausiinsider.com/new-brunswick-seafood-giant-cooke-inc-acquires-australias-tassal-grou...

The two largest U.S. rail unions representing conductors and engineers split in ratification votes on a tentative contract deal reached in September raising the possibility of a strike or lockout that could cause significant damage to the U.S. economy. Members of the Brotherhood of Locomotive Engineers and Trainmen (BLET) voted to ratify the agreement while train and engine service members the transportation division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) voted to reject the deal. SMART-TD yardmasters voted to ratify their national agreement, the unions said Monday. The vote could put pressure on Congress to intervene to prevent a strike or lockout ahead of the holiday season. “The ball is now in the railroads’ court. Let’s see what they do. They can settle this at the bargaining table,” said SMART-TD President Jeremy Ferguson said in a statement. “This can all be settled through negotiations and without a strike.” If there i...

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...

Spin Master Corp. TOY-T says it has signed a deal to buy Canadian puzzle company 4D Brands International Inc. Financial terms of the agreement for the maker of three dimensional model construction kits were not immediately available. Spin Master co-founder Anton Rabie says 4D’s puzzles offers innovation for a classic pastime. The company’s kits include cityscapes, well-known landmarks as well as collectibles from franchises including Star Wars, Disney, Harry Potter, Marvel Universe and DC Comics. Shaun Sakdinan, founder of 4D Puzzles, will join Spin Master as senior director of design based in Toronto. The deal is expected to close in January. https://www.tausiinsider.com/spin-master-signs-deal-to-buy-canadian-puzzle-company-4d-brands-international/?feed_id=333259&_unique_id=64771146e789b

Britain’s competition watchdog said on Tuesday U.S.-listed oil field services firm Baker Hughes Co’s acquisition of Altus Intervention could reduce competition among U.K. oil and gas operators. The Competition and Markets Authority (CMA) said it was concerned that the loss of rivalry between the merging companies could lead to higher prices, reduced choice and lower quality services for businesses in the U.K. that purchase coiled tubing and pumping services. In the U.K., both Baker Hughes BKR-Q and Altus supply various well intervention services – essential services used by oil and gas operators to manage well production. Baker Hughes said it was reviewing the regulator’s findings and would work constructively with the CMA. The U.S. company added that the regulator had not questioned the deal rationale but only highlighted overlapping businesses in the areas of coil tubing and pumping services in the UK. Altus did not immediately respond to a Reuters request for comment. The CMA said...

A government-mandated reduction in wireless prices by Canada’s three largest carriers had “significant and detrimental effects” on Shaw Communications Inc.’s Freedom Mobile, a Shaw executive told the Competition Tribunal hearing into the telecom’s proposed $26-billion merger with Rogers Communications Inc. Shaw president Paul McAleese told the tribunal that Ottawa’s request in 2020 that Rogers, BCE Inc. and Telus Corp. reduce the prices of their mid-tier cellphone plans over two years was “singularly the most traumatic event for the Freedom pricing construct.” Explainer: How the Rogers-Shaw merger ended up in front of the Competition Tribunal Shaw has yet to recoup $4.5-billion investment in Freedom Mobile, CFO tells tribunal Freedom Mobile typically charged about 25 to 30 per cent less than its larger competitors on account of having a “less mature” wireless network, Mr. McAleese said. That left the carrier in a difficult position when BCE’s Bell, Telus and Rogers dropped the prices...

Workers at the largest U.S. rail union voted against a tentative contract deal reached in September, raising the possibility of a year-end strike that could cause significant damage to the U.S. economy and strand vital shipments of food and fuel. Reuters https://www.tausiinsider.com/video-biggest-u-s-rail-union-raises-threat-of-strike/?feed_id=333095&_unique_id=6473f346ef917

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 Rogers Building in downtown Toronto. CARLOS OSORIO/Reuters It is not necessary to own a cable network in order to successfully operate a wireless carrier, Rogers Communications Inc.’s RCI-B-T chief technology officer told a Competition Tribunal hearing into Rogers’ proposed $26-billion takeover of Shaw Communications Inc SJR-B-T. The comments by Ron McKenzie, the chief technology and information officer at the Toronto-based telecom giant, speak to a core issue in the merger case: whether Quebecor Inc. QBR-B-T will be able to successfully run Shaw’s Freedom Mobile without owning cable infrastructure in Western Canada. The Competition Bureau is attempting to block the merger of Canada’s two largest cable companies, arguing that the deal will reduce competition in the wireless industry, leading to higher cellphone bills and poorer service. The Competition Tribunal adjudicates on matters of civil competition and is hearing arguments on the proposed deal. Explainer: How the Rogers-Sha...