The Big Three: Aimia rejects Air Canada; Toronto home sales surge; Apple hits $1T
We're watching one of the year's most incredible Canadian business stories play out before our eyes as Aimia pulls out all the stops on Aeroplan. First, Aimia announced late yesterday it had rejected a sweetened $325-million takeover offer from Air Canada, TD, CIBC and Visa. Aimia indicated it counter-proposed $450 million. Problem is, we have no idea how that proposal was received by Air Canada et al. because it wasn’t acknowledged in their release (and Air Canada hasn’t yet returned our request for comment). Now, Porter Airlines swoops in as a player - announcing this morning it's going to become an Aeroplan partner in 2020. My main question this morning is whether that makes Porter (and its passengers) the biggest winner of all.
Important to point out: Even in trying to reassure members, there’s a somewhat ominous tone to this line from Aimia CEO Jeremy Rabe in the company’s release last night: "It is business as usual for Aeroplan and we expect all of the companies in the Current Partner Consortium to honour their long standing contractual obligations including issuing and redeeming members' miles."
TORONTO HEATS UP, VANCOUVER IN SUMMER CHILL
The study in contrasts is compelling. New numbers today show home sales across the Greater Toronto Area surged 18.6 per cent year-over-year in July and prices rose almost five per cent. So demand is heating up in Canada’s largest housing market while a chill hits Vancouver, where sales plummeted to an 18-year low last month. The dynamics for detached properties are most compelling. In Toronto, sales surged 26.8 per cent y/y with the average price at $1.004 million. In Vancouver, detached home sales sank 32.9 per cent with the benchmark price $1.59 million.
“SHOCK AND AWE” AT QUEEN’S PARK
It’s been a little more than a month since Doug Ford was sworn in as Ontario’s premier, with business leaders left reeling in the process by swift moves like booting out Hydro One’s board and CEO. BNN Bloomberg's Jameson Berkow has been in touch with Queen’s Park and Parliament Hill alumni to assess Ford’s tactics (dubbed “shock and awe” by one). Read his story here.
OTHER NOTABLE STORIES
-Add Second Cup to the list of companies waiting for Doug Ford’s government to confirm its plan for pot retail. The coffee chain said this morning it is “awaiting a formal announcement” from Queen’s Park so that it can assess the impact alongside its cannabis partner National Access Cannabis. Recall the two are already eyeing opportunities in Alberta.
-BCE and Rogers have emerged tied as Canada’s second-quarter wireless leaders after Telus reported 87,000 postpaid adds this morning.
-The discount on Western Canadian Select oil has widened to a five-year high of $30.80/barrel. Bloomberg is pointing to rail and pipeline capacity constraints as the catalysts.
-Fairfax Financial disclosed a $58.2-million net loss on its investments in the second quarter late yesterday as the stock market ran away from its bearish bets (with a $97.6-million loss on short positions).
-Apple held on to its trillon-dollar valuation at yesterday’s closing bell. We’ve got Tom Walters’ report for National on the milestone. S&P’s Howard Silverblatt joins The Open to provide historical context.
-Notable earnings: Enbridge, Telus, Aimia, GMP Capital, Dorel Industries, TransAlta, Kraft Heinz
-Notable data: Canadian trade balance, U.S. non-farm payrolls, U.S. trade balance
-8:30 a.m. ET: Fairfax Financial holds quarterly conference call
-Foreign Affairs Minister Chrystia Freeland attends ASEAN meeting in Singapore
Every morning BNN Bloomberg's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN Bloomberg'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.bnnbloomberg.ca/subscribe.