Financial prospects flicker on $11 bln power deal 9 Feb 2016 Canadian utility Fortis would need some $230 million a year in cost savings or other gains to justify the $1.7 bln premium it’s paying for U.S.-based ITC. The strategic sense in the acquisition doesn’t include obvious synergies. That makes a return for Fortis investors look dim.
Lowe’s makes an offer even Canada can’t refuse 3 Feb 2016 The U.S. home-retailing chain has won over Rona with a 104 pct premium valuing its northern counterpart at C$3.2 bln. Protectionism helped thwart a bid from Lowe’s in 2012. A strong dollar made a knockout bid easier now. And it turns out the color of money suits any flag.
Online poker CEO gives shareholders an out 1 Feb 2016 The boss of Amaya, owner of PokerStars and other gambling sites, is offering to take the company private for up to C$4.4 bln. Though the shares have fallen by half over the past year, there’s a 40 pct premium in the woolly bid. It could pay to cash out now in case it’s a bluff.
TransCanada $15 bln pipeline claim a worthy gamble 7 Jan 2016 The Canadian energy group is suing the Obama administration for nixing the Keystone project, seeking damages worth over half the company’s value. Investors seem skeptical, and the case could take years to resolve. But the suit seems justified, despite the long odds of a payoff.
Valeant’s temporary boss has his work cut out 6 Jan 2016 The drugmaker’s ex-CFO replaces a muddled three-headed approach implemented after CEO Mike Pearson fell ill with pneumonia. Former Goldman banker Howard Schiller helped build the acquisitive Valeant. Buying is one thing. Running an embattled company requires different skills.
Rail mega-deal holds ticket to runaway M&A train 29 Dec 2015 Canadian Pacific’s $28 bln bid for Norfolk Southern involves an industrial buyer facing low growth and an aggressive investor. The offer is unsolicited, cross-border and legally messy. After a record year of mergers, this one transaction foretells much of what to expect in 2016.
Valeant has a pricing problem 16 Dec 2015 The $40 bln drug maker has a new distributor: U.S. pharmacy chain Walgreens. But a reduced revenue forecast for the fourth quarter suggests Valeant is cutting prices. The $30 bln of debt from its recent acquisitive past helps give insurers and other buyers an advantage.
Contortions make rail deal tough sell for Ackman 8 Dec 2015 A revised offer from Canadian Pacific for Norfolk Southern, together worth nearly $50 bln, included an interim trust, less cash and finger-in-the-air merger math. The activist contributed 23 pages of slides. NS was too quick to rebuff it. Investors, though, may just be confused.
Valeant poised to cause much collateral damage 7 Dec 2015 The acquisitive drugmaker’s travails have vaporized fortunes, damaged reputations and dusted the sector with political radioactivity. Indirect effects could be even larger. Valeant will take its toll on so-called platform companies, “adjusted” accounting and hedge funds broadly.
Rail deal’s logic loses steam under legal scrutiny 4 Dec 2015 Norfolk Southern rejected a $28 bln bid from Canadian Pacific, which could probably afford up to $33 bln. Regulatory approval is a bigger issue, though. The bar is high for railroad mergers, and this one likely falls short. It may be one deal that shouldn’t have left the station.
Bankers catch a crumb in critical conflicts case 30 Nov 2015 Delaware’s top court chided RBC in its upholding of a $76 mln penalty against the firm for working both sides of a deal. In a footnote, though, the tribunal toned down a lower court’s notion that advisers must save directors from themselves. The buck still stops in the boardroom.
Qube edges ahead in Aussie infrastructure fight 26 Nov 2015 Brookfield’s $6.5 bln agreed bid for Australia’s Asciano has hit serious opposition from competition regulators. The Canadian group could yet salvage its takeover. But interloper Qube, whose break-up consortium is already examining Asciano’s books, now looks like the favourite.
Bombardier subsidies offer crucial but costly lift 19 Nov 2015 The Canadian aerospace firm’s rail unit agreed to a $1.5 bln infusion from Quebec, days after the province struck a deal to invest in its wobbly jet project. Public cash buys time but comes with pricey terms and governance risks. Potential mergers may be harder to pull off, too.
New Chicago Skyway owners need long investing view 16 Nov 2015 Ferrovial and Macquarie paid $1.8 bln in 2005, $1 bln more than the next bid. Now three Canadian pension funds are buying the Windy City turnpike for $2.8 bln. Thanks to extra debt, the sellers won’t see much profit on their equity. At least the buyers can afford to be patient.
Valeant CEO gets called on $100 mln excess 6 Nov 2015 Paying bosses in equity nudges them to serve shareholder interests. The pharma giant went to extremes, allowing chief Michael Pearson to borrow heavily against his shares. The tumbling stock forced him to repay the debt - an example of how skewed incentives have rocked Valeant.
Bill Ackman pushes limits of activism at Valeant 5 Nov 2015 The hedge fund boss hinted the drugmaker’s CEO may need to go and was invited into the boardroom mid-crisis, according to a newspaper report. Ackman also seems to have usurped Valeant’s defense. The $55 bln of quickly lost market value suggests his involvement isn’t helping much.
Brookfield’s Aussie deal faces surprise blockade 30 Oct 2015 The Canadian group’s $6.3 bln offer for Australian port and rail group Asciano has been upset by smaller local rival Qube and partners snatching a 20 pct stake. Brookfield cannot sweeten its way out of trouble. Still, some mix of asset sales and co-investments might just work.
Valeant’s clarification efforts further tangle web 26 Oct 2015 The acquisitive pharmaceutical company’s attempt to explain ties to drug distributors failed to clear things up. Analysts didn’t ask – and a 90-page presentation and call with investors didn’t answer – why it obscured the dealings. The messy details also confirm some fears.
Valeant sets tone for post-M&A accounting scrutiny 22 Oct 2015 The drugmaker’s stock ended Wednesday down 19 pct after a short-seller and others questioned its bookkeeping. The $40 bln serial acquirer’s history may make it an obvious target, but as growth and mergers slow a renewed investor focus on companies’ figures is a logical shift.
New Canadian PM faces choppy economic ice 20 Oct 2015 Justin Trudeau’s Liberals trounced Stephen Harper’s Conservatives in Monday’s election. But the global commodities chill hit Canada hard and the weak currency hasn’t lifted trade. Even hockey franchises are hurting. Trudeau will have to make the most of his honeymoon period.