Here are the top reads about deals and financial services stories from the week. Have a great weekend,
Canadian banks pressed to sell stock for less: Canada has long enjoyed a dubious distinction in capital markets. This is one of the most expensive places in the world for a company to raise money by selling stock. Royal Dutch Shell PLC took a sledgehammer to that convention this week, paying rock-bottom fees to its banks as it sold a $4.3-billion stake in Canadian Natural Resources Ltd. Story (Andrew Willis)
Paul Desmarais Jr. denies knowledge of payments in Syria: Canadian billionaire Paul Desmarais Jr. delivered a vigorous defence Friday of his actions as a director of cement maker LafargeHolcim Ltd., denying he knew about allegations that it paid terrorists to keep a plant in northern Syria open and laying responsibility at the feet of senior management. Story (Nicolas Van Praet and Jacqueline Nelson)
Scams: Initial coin offerings have become the most common way to finance cryptocurrency ventures, of which there are now nearly 1,600 and rising. In exchange for your dollars, pounds, euros, or other currency, an ICO issues digital “tokens,” or “coins,” that may or may not be used to purchase some specified good or service in the future. Thus it is little wonder that, according to the ICO advisory firm Satis Group, 81 per cent of ICOs are scams created by con artists, charlatans and swindlers looking to take your money and run. Opinion (Nouriel Roubini)
Earnings: Thomson Reuters Corp. showed glimpses of faster growth in its first-quarter financial results, as the news and information giant began the work to spin out its largest division in a joint venture with private equity giant Blackstone Group LP. Story (James Bradshaw)
Retail sector: Canadian Tire Corp. Ltd. is taking a big step outside the country by agreeing to acquire the Norway-based Helly Hansen sportswear and industrial clothing line for $985-million with an eye to eventually using it as a springboard to expand its own brands globally. Story (Marina Strauss)
Behind the deal: Three years ago, Ontario Teachers’ Pension Plan appeared stuck with a bad investment. Its buyout of apparel brand Helly Hansen had all the hallmarks of a private equity deal gone sour. Thursday’s sale of the business for $985-million to Canadian Tire Corp. ends a chapter in a good turnaround story – a story that proves strategy and management can make all the difference. Story (Tim Kiladze and Jacqueline Nelson)
Energy sector: Enbridge Inc. is weighing further asset sales this year after notching $3.2-billion in deals as the company accelerates efforts to reduce debt. Story (Jeff Lewis)
ETFs: Canadian institutional investors are shifting more assets into exchange-traded funds and now have the highest allocation to ETFs among their global peers. Story (Clare O’Hara)
Energy sector: Enbridge Inc. is poised to blow past its target for asset sales this year, easing pressure on chief executive officer Al Monaco as he seeks to chop debt and simplify the company’s complex operations. Story (Jeff Lewis)
Pharmaceuticals: Canadian generic drug giant Apotex Inc. is shaking up its international footprint by merging its Australian business with that of a rival. Story (Tim Kiladze, for subscribers)
Insurance sector: Sun Life Financial Inc.’s CEO Dean Connor is sitting on an influx of spare cash, but it isn’t burning a hole in his pocket. Story (Jacqueline Nelson, for subscribers)
Mortgages: Home Capital Group Inc. continued to rebuild its mortgage business in the first quarter of 2018, issuing nearly $1.2-billion in new home loans − a 33-per-cent increase from the prior quarter. Story (James Bradshaw)
Mortgages: It just got a little tougher to qualify for a mortgage in Canada. A rate used in mortgage stress tests – more formally known as the Bank of Canada’s conventional five-year mortgage rate – is now 5.34 per cent, up from 5.14 per cent. Story (Matt Lundy)
Equities: A new divergence has opened up in U.S. markets that may result in renewed selling pressure on sluggish Canadian bank stocks. Story (Scott Barlow, for subscribers)
Mining sector: Nevsun Resources Ltd. has firmly rejected a $1.5-billion takeover proposal from Lundin Mining Corp. and Euro Sun Mining Inc., but is leaving the door open to a deal if Lundin ditches its junior partner. Story (Niall McGee)
Bought deal: Royal Dutch Shell PLC and its banks have cashed in on one of precious few opportunities to unload a mountain of Canadian energy shares at a tidy profit. Shell’s $4.3-billion secondary offering of Canadian Natural Resources Ltd. stock was said on Tuesday to be placed mostly with institutional investors. Story (Jeffrey Jones, for subscribers)
Convertibles issued: Almost two decades after they joined forces to keep cable operator Videotron on home soil, Quebecor Inc. and the Caisse de dépôt et placement du Québec have struck an agreement worth $1.69-billion to give the company full control over its main subsidiary. Quebecor said Tuesday it will repurchase the Caisse’s remaining 18.5-per-cent stake in Quebecor Media Inc. by issuing $150-million worth of convertible debentures and will use cash to fund the rest of the buyout. Story (Christine Dobby)
From Globe Investor: Analysts are turning overwhelmingly bullish on Manulife Financial Corp. amid a brightening economic backdrop and the company’s improving financial performance. Is the stock at last regaining the lustre it lost nearly a decade ago? Story (David Berman, for subscribers)
FRIDAY EARNINGS WRAP
Power Corp. says its net earnings more than doubled to a record $525 million in the first quarter. Story
Onex Corp. reported a loss in its latest quarter, a day after it raised its quarterly dividend by 17 per cent. Story
FRIDAY FINANCIAL SERVICES WRAP
Fines: British regulators and Barclays have fined the bank’s chief executive Jes Staley a combined £1.1-million pounds ($1.9-million) after he tried to identify a whistle-blower who sent letters criticizing an employee of the bank. Story
FRIDAY DEAL WRAP
Fintech: Ant Financial, the Chinese payments giant controlled by Jack Ma, is expected to close a fundraising of at least $10 billion in the next few days, attracting Carlyle Group and the Canada Pension Plan Investment Board as first-time investors, according to people familiar with the matter. Story
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