A Bay Street sign, a symbol of Canada's economic markets and where main financial institutions are located, is seen in Toronto, May 1, 2013.Mark Blinch/Reuters
Legendary value investor Warren Buffett's interest in rescuing Home Capital Group Inc. was piqued by an e-mail from 82-year-old Don Johnson, a Canadian banker who sends his thoughts to the investing guru now and then. Story (James Bradshaw and Jacqueline Nelson)
Warren Buffett is bullish on Canadian residential real estate. He's even more bullish on Canada. Story (Andrew Willis)
DAILY DEALS
Warren Buffett doesn't come cheap. Just ask Home Capital Group Inc. His Berkshire Hathaway Inc. has agreed to indirectly buy $400-million of Home Capital's shares and provide a new $2-billion line of credit on slightly better terms than the emergency loan the Toronto-based mortgage lender received in April. Story (Christina Pellegrini)
Shares of Altice USA Inc rose as much as 7.2 per cent in their debut on Thursday, giving the cable operator a market capitalization of $23.71-billion as it prepares for U.S. expansion. Story
American Airlines Group Inc said on Thursday that Qatar Airways, the Gulf country's state-owned airline embroiled in a airspace row, had expressed interest in buying as much as a 10 per cent stake worth at least $808-million in the U.S. airline. Story
WHAT WE'RE READING
Canada's life sciences sector is on a roll. Current levels of venture capital investment are unprecedented. Dollar flows set a record last year, with $1.1 billion deployed to 74 biotech companies, according to Thomson Reuters data. That exceeds the prior record in 2000 by 32 per cent. Story (PE Hub Network)
On pace to eclipse the $1.7 billion (U.S.) in aggregate venture capital invested last year, insurtech attracted investor interest more slowly than the general fintech field at first. However, disruption comes for all. Story (Pitchbook)
FROM THE ANALYSTS
Prakash Gowd, analyst at CIBC World Markets, had this to say about Concordia International Corp. hiring Perella Weinberg Partners LP to provide financial advisory services.
"While on the surface this news may appear positive, we believe it may signify a more serious situation with the company's finances that requires immediate attention," he wrote in a research note. "We believe that an outright sale of the business is highly unlikely, principally because proceeds of a potential sale of either or all of the company's segments (U.S. and International) won't be able to cover the $3.5-billion (U.S.) in debt still outstanding."
He added, "Piecemeal divestitures are possible, although they would be considered distressed sales. More likely, Concordia could be pursuing recapitalization alternatives as it relates to its debt. As we have mentioned numerous times in previous notes, we believe Concordia will face a significant cash shortfall by 2019 based on the company's provided debt amortization schedule." Staff
Benoit Poirier, analyst at Desjardins Securities, on Stantec Inc.'s acquisition of RNL Design, a 134-person integrated architectural, interior and urban design firm.
"Although the terms of the deal were not disclosed, we believe Stantec could pay a total consideration of C$13-million to $16-million based on a 'back of the envelope' estimate of C$100,000–$120,000/employee," he wrote in a research note.
It is a small acquisition that will have a nominal effect on earnings before interest tax and depreciation and amortization, the analyst said, but he believes the company's balance sheet has the capacity for more acquisitions. "Overall, we believe the addition of RNL reaffirms management's ability to derive incremental growth from the acquisition and integration of specialized firms that not only deepen Stantec's existing client relationships but also provide opportunities for revenue synergies across its larger platform," he wrote. Staff
ELSEWHERE IN FINANCE
India's liquor market was for years a thorn in the side of Diageo PLC, the world's largest spirits maker. Then it met the "King of Good Times." Story (WSJ, subscription required)
China's banking regulator is conducting a sweeping check on the borrowings of some of the country's top overseas deal makers, according to people with knowledge of the matter, in one of the most forceful attempts yet to get a grip on runaway debt. Story (WSJ, subscription required)
The Federal Reserve is releasing the results of its annual stress tests of big banks in two parts, on Thursday, June 22, and Wednesday, June 28. Here is what you need to know about the exams. Story (WSJ, subscription required)
Venezuela's central bank is seeking to sell fixed-income securities to Nomura Holdings Inc as a way of raising cash amid an economic crisis, an opposition deputy and a finance industry source said on Thursday, only weeks after a similar deal embroiled the Japanese bank in controversy. Story (Reuters)