The Big Three: BMO boosts dividend; Trans Mountain moves forward; HBC committee rejects Catalyst
Modest profit growth and big gains in provisions for credit losses. Those are the trends so far from the Canadian banks this reporting season. This morning, Bank of Montreal reported mid-single digit profit growth – and a 23 per cent jump in provisions for credit losses. But BMO also topped earnings per share expectations, and delivered a dividend hike. The other major Canadian banks will report over the next two days, so we’ll see if it’s a common theme among the Big Six.
TRANS MOUNTAIN EXPANSION CONSTRUCTION BEGINS
After years of delays, right-of-way construction will begin on the Trans Mountain pipeline expansion project today. The moment will be marked by an event in Acheson, Alta,, with government and First Nations leaders and Trans Mountain’s CEO. Media reports suggest there could be pipe in the ground before Christmas. The project still faces legal challenges.
HBC COMMITTEE REJECTS CATALYST BID
The bidding war for HBC is turning into a war of words. Hudson’s Bay’s special committee of board directors rejected a takeover offer from Catalyst Capital. In a press release issued Monday night, HBC’s board said Catalyst’s $11 per share offer “is not reasonably capable of being consummated” given the Richard Baker-led group’s 57 per cent stake in the company. The Baker-led group (which includes Rhone Capital, WeWork Property Advisors, Hanover Investments and Abrams Capital Management), called the offer “illusory,” “intended to mislead minority shareholders” and “manipulate the market.” Meantime, Catalyst Capital is seeking a hearing with the Ontario Securities Commission to block the Baker Group’s bid, which Catalyst says was “the result of a deeply flawed process.”
TRUMP SAYS 'NO TIMELINE' ON A TRADE DEAL WITH CHINA
At a press conference from the NATO Summit in London today, U.S. President Donald Trump said there’s “no deadline” on the timing of a trade deal with China, and he likes the idea of waiting until after the 2020 U.S. election to make a pact. He also spoke out about France’s plan to tax U.S. technology companies, saying that, if anything, “it's going to be the United States that will tax them.”
OTHER NOTABLE STORIES
-CN Rail is revising its full-year outlook to reflect the impact of its recent labour strike. The company now sees profit growth in the low to mid-single digit range, revised down from its October outlook, which called for adjusted EPS growth in the high single-digit range. The impact from the strike amounts to 15 cents per share.
-Australia’s Caltex rejected a $5.84 billion takeover offer from Alimentation Couche-Tard, saying “that the proposal undervalues the company.” However, Caltex offered to give Couche-Tard some more private information in order to revise is offer.
-An Alberta government panel looking at ways to make the province more independent is holding its first town hall meeting tonight in Edmonton.
-The Stars Group (formerly known as Amaya) is buying the remaining 20 per cent interest in Australia’s BetEasy for $138M
-Canopy Growth Corp. has launched its hemp-derived CBD brand, marking the pot giant's first official presence in the U.S. consumer market.
-3:15 p.m. ET: Government and First Nations representatives will join Trans Mountain CEO in an event in Acheson to mark the start of right-of-way construction of the Trans Mountain expansion project
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. Today's note was written by Senior Producer Roula Meditskos. Have it delivered to your inbox before the trading day begins by heading to www.bnnbloomberg.ca/subscribe.