Here's the Streetwise morning meeting, a roundup of deals and what's going on in the banking world.
BHP shapes up balance sheet
If you're going to heft $45-billion in debt to buy Potash Corp. of Saskatchewan Inc., you want your balance sheet in good shape. BHP Billiton started that process in the last quarter, cutting its debt by more than half. It helps of course when your profit almost doubles, throwing off a few more billion in cash flow to send the banks' way. That said, BHP vowed not to overpay, again.
Saskatchewan to review bid
Early on in the Potash Corp. of Saskatchewan takeover saga, the government of Saskatchewan seemed to throw its arms wide open to the idea of a BHP buyout of Potash. But the idea that BHP may abandon the Canpotex marketing agreement may have changed that stance. Now the provincial government is saying it plans to review the deal with its own advisers.
It's unclear if the province could do anything to stop the transaction, but the prairie government does have influence. The Saskatchewan Party government of Premier Brad Wall is very tight with the Harper government in Ottawa, and Mr. Harper needs Saskatchewan on his side. Thirteen of the 14 federal Members of Parliament from the province are Conservatives, representing a big chunk of Mr. Harper's minority government.
CIBC trading revenues halved
It wasn't quite as grim a summer as at Bank of Montreal, which posted a $1-million loss on its trading revenue line, but Canadian Imperial Bank of Commerce too had a drop in trading income. Trading revenue fell to $84-million in the most recent quarter from $178-million in the three months prior. The bank's capital markets revenue dropped to $241-million in the third quarter from $275-million in the second quarter as markets slowed. Corporate and investment banking revenue picked up, though, helping to offset the capital markets result. However a loss on the bank's portfolio of structured credit that its running off left the bank with a much weaker performance overall. At the same time expenses rose. The result was net income for wholesale banking dropped to $25-million from $189-million. All the details are in CIBC's supplemental package.
Psst, pal, wanna buy a dry dock?
Dubai World has identified assets to sell as it seeks to raise almost $20-billion (U.S.) to fix a capital structure that it says is in "urgent" need of work. Assets that may go on the block include a stake in Barney's, the luxury retailer, and a dry dock. Who doesn't need a dry dock?
Newfoundland expropriates, Ottawa pays
Danny Williams just got less popular in Ottawa -- if that's possible. The Newfoundland premier's decision to expropriate assets from forestry company AbitibiBowater is going to cost the federal government big time. Ottawa is paying the $130-million needed to settle a NAFTA case brought by the company.