Here are the top reads on deals and financial services over the last week. It has been a short and quiet week, so we’ve also included some more best-read pieces of the past year. Happy New Year!
Aphria takeover offer raises questions about suitor’s independence: A web of connections between Aphria Inc. and its suitor has come into focus in the wake of an unusual takeover offer for the Canadian cannabis company.Most notably, a number of Aphria directors, including chief executive officer Vic Neufeld, have been part of business dealings in the United States with the Schottensteins − the American family behind the recent takeover proposal from Xanthic Biopharma Inc. The connections may be nothing more than coincidence, and in an e-mail, a Green Growth spokesperson said they do “nothing to change the merits of the offer.” But their existence adds another wrinkle to the proposal, which comes with unusual terms relative to merger and acquisition norms. Aphria’s board rejected the deal on Friday. Story (Tim Kiladze, Jeffrey Jones, for subscribers)
Why Hydro One still wants to buy Avista: Like a dog chasing a car, executives at Hydro One Ltd. are going into the new year determined to complete their $4.4-billion takeover of U.S. utility Avista Corp. The acquisition, launched in the summer of 2017, seems doomed to fail. Opinion (Andrew Willis, for subscribers)
How blocked mergers foiled banks' ambitions — and forced the Big Six to innovate: When Royal Bank of Canada and Bank of Montreal announced a surprise plan to merge on Jan. 23, 1998, the news landed like a bombshell. By the time then-finance minister Paul Martin dashed their hopes less than a year later, the notion of mega-bank mergers had turned radioactive. It was 20 years ago, on Dec. 14, 1998, when Mr. Martin turned down RBC and BMO’s plan, as well as a subsequent tie-up proposed by Canadian Imperial Bank of Commerce and Toronto-Dominion Bank. His ruling stamped big bank mergers as politically untouchable in Canada, and that imprint is still clearly visible today. Story (James Bradshaw, for subscribers)
Open banking offers a clear pathway to an innovative data future: Open banking is about to change the financial sector. New technology, platforms and initiatives such as the Advisory Committee on Open Banking created by the federal government show that open banking will transform the market and the way banks do business. Many see open banking as a threat; in reality, it’s a clearer pathway to digital transformation. Opinion (Al Karin Somji)
MORE FINANCIAL SERVICES NEWS FROM FRIDAY
Settlement: Wells Fargo & Co. will pay US$575-million to settle claims made by U.S. states that the bank created phoney accounts and committed other customer abuses, according to a statement by the Iowa Attorney-General’s office. Story (for subscribers)
BEST OF THE YEAR
Wall Street’s latest fad just ate your RRSP: Last year, Steven Hawkins offered the kind of investment you dream of owning: An exchange-traded fund (ETF) that soared by 174.5 per cent as stock markets sailed along serenely. On Monday, that fund was part of a meltdown that took a big bite out of your RRSP. Mr. Hawkins, president and co-chief executive of Horizons ETFs Management (Canada) Inc., watched most of his all-star ETF’s 2017 gains evaporate on what he describes as “a completely insane” Monday afternoon, when a sharp, but not unprecedented, downturn knocked the stuffing out of many financial products created to give investors a play on stock price swings. Story (February 2018, for subscribers)
Aphria looks to unload assets in retreat from U.S. cannabis market: Aphria Inc. is taking steps to pull back from the U.S. medical-marijuana market as it moves to fall in line with Toronto Stock Exchange rules. For Aphria, retreating from the United States will be complicated. Story (February 2018, for subscribers)
Li Ka-shing in hunt for Bombardier’s Toronto site: Hong Kong billionaire Li Ka-shing and two Canadian investors have made Bombardier’s short list of buyers for the manufacturer’s aerospace plant and surrounding lands in northwest Toronto, according to sources familiar with the matter. Bombardier is mulling bids from three frontrunners. Story (April 2018, for subscribers)
Manulife’s U.S. arm swept up in GE’s $9.5-billion insurance writedown: For the second time in as many months, a surprising shakeup in the American insurance market has dimmed the prospects for one of Manulife Financial Corp.'s most troublesome businesses, suggesting once again that the fixes promised by the insurer’s newly minted chief executive officer will come with costs attached. Dating back to the global financial crisis, Manulife has struggled to manage its long-term care and variable annuity divisions in the United States, both of which were acquired when the insurer bought John Hancock for $15-billion in 2003. Story (January 2018, for subscribers)
OMERS names new president, CIO: The Ontario Municipal Employees Retirement System (OMERS) is shaking up its management structure and promoting internal leaders in a move that signals the pension plan is planning for the future. OMERS, which invests and administers pensions for almost half a million members and has more than $95-billion in net assets, has internally announced a series of executive changes set to take effect on April 1 that will reshape the executive team reporting to OMERS chief executive officer Michael Latimer. Story (March 2018, for subscribers)
MedReleaf seeking buyer as pot industry consolidates: sources: One of Canada’s biggest medical marijuana companies is on the block and conducting talks with some of its rivals that could lead to the creation of the country’s most valuable cannabis grower, sources say. The most serious discussions MedReleaf Corp. of Markham, Ont., is having are with Aurora Cannabis Inc., said the sources, who spoke on the condition of anonymity because the talks are private. Story (May 2018, for subscribers)
Ontario PC Leader Doug Ford’s attack on Hydro One is amateur hour: Ed Clark’s frustration was palpable. Sitting on a podium in a drab government conference room one day in 2015, the newly retired chief executive of Toronto-Dominion Bank was fresh meat for the Ontario political press gallery. As an adviser to Premier Kathleen Wynne, and as the provincial government’s point person for its privatization of Hydro One Ltd., Mr. Clark was given the task of leading a press conference for the utility’s $1.8-billion initial public offering. Story (April 2018, for subscribers)
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