The battle between franchisees and Tim Hortons’ parent company is going under the microscope in Ottawa. The federal government says it’s “monitoring compliance” with the pledges 3G’s Restaurant Brands International made to win the Harper government’s blessing for its $12.5-billion takeover of Tim Hortons in 2014. BNN's Paige Ellis obtained the letter sent to Bains by frustrated franchisees that takes aim at the Brazilian buyout firm’s alleged “self-serving attempts” to boost RBI’s bottom line. BNN's Jameson Berkow will sift through the details and also juxtapose the feds’ involvement in this file versus some other controversial takeovers. We’ll chase reaction from some Investment Canada Act experts to explain next steps for Bains.
And as a refresher, it’s worth looking back at the language used around the time of the deal.
-3G vowed “not to change the way Tim Hortons works with its franchisees” when the deal was announced on 8/26/14
-It also gave a nod to Tim Hortons as “an unparalleled Canadian success story” in its presentation deck at deal time
-And here’s the bullet-point statement then-Industry Minister James Moore released when he gave the go-ahead
GEARING UP FOR TRANS MOUNTAIN SUMMIT
Prime Minister Justin Trudeau will try to solve the interprovincial impasse on the controversial Trans Mountain expansion project this weekend when he convenes a meeting with B.C. Premier John Horgan and Alberta Premier Rachel Notley. The most important question ahead of that gathering is how/if he can broker an agreement that pulls Canada out of its pipeline fight. Horgan gave no indication yesterday that he’s prepared to back down. While his provincial kingmaker, Andrew Weaver, mapped out a hypothetical scenario on BNN that could lead to a compromise (stress-tested by Jameson Berkow here. We’ll discuss the stakes today.
FORD VERSUS MAYO
Doug Ford is vowing to “fire” Hydro One CEO Mayo Schmidt if he’s elected premier of Ontario this summer, claiming Schmidt and the utility’s board are “laughing themselves to the bank”. Two things. One: the premier can’t dump the CEO Apprentice-style. There’s a process in place, as mapped out under the governance agreement between the province and the company. Two: how’s that type of warning going to play out in the business community? We’ll gather reaction.
TRUMP SIZES UP TPP
U.S. President Donald Trump is getting everyone excited about the prospect of America returning to the table on the Trans-Pacific Partnership, or – as it’s known now: the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Hours after it surfaced that he’s tasking Robert Lighthizer and Larry Kudlow with looking into it, Trump said in a tweet he’d “only join TPP if the deal were substantially better than the deal offered to Pres. Obama.” We’ll see how that goes. From Canada’s perspective, we should consider how Lighthizer’s workload is growing more daunting, and what that means for the imperative to cut a NAFTA deal. We’ll cover this with Dominic Barton at 1010 and Rona Ambrose at 1500.
OTHER NOTABLE STORIES:
-Seattle-based 22NW Fund has come out swinging against Aimia, saying it's time to overhaul the loyalty company's board amid "ineffective oversight" by current directors. 22NW holds three per cent of Aimia's shares and says it will withhold votes for all legacy directors.
-Keep an eye on shares of Premier Brands after it announced a deal to buy Seattle-based beef jerky-maker Oberto Sausage Company alongside a share sale that will raise $150 million.
-Bloomberg has gotten its hands on some of the most coveted financial information in the commodities universe: Saudi Aramco's numbers, which reportedly show the oil Goliath notched almost US$34 billion in profit during the first half of last year.
-Crescent Point Energy is taking another swipe at Cation Capital’s campaign to clear out some of the company’s board, framing it as being based on a “self-serving agenda”.
-Royal LePage’s new home price report is light on surprises since we track the monthly numbers in major markets. Still worth pointing out its CEO’s outlook: "Those looking for this slowdown to translate to material year-over-year home price drops shouldn't hold their breath," Phil Soper said in a release, while going on to include "sustained trade war" as a caveat to that thesis.
NOTABLE RELEASES/EVENTS
Notable data: Canadian existing home sales, U.S. consumer sentiment
Notable earnings: Citigroup, JPMorgan Chase & Co., Wells Fargo
10:45 a.m. ET: B.C. Attorney General David Eby delivers speech to Greater Vancouver Board of Trade
11:50 a.m. ET: Prime Minister Justin Trudeau delivers remarks in Lima at Summit of the Americas “Invest in Canada” session
4:00 p.m. ET: Trudeau meets with Mexico President Enrique Pena Nieto in Lima
Every morning BNN's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnn.ca/subscribe.
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