Dec 15, 2020
The Daily Chase: Transat says it rejected rival bid; IEA cuts oil demand forecasts
By Noah Zivitz
LATE TWIST IN TRANSAT TAKEOVER
Fascinating disclosure by Transat AT less than an hour before the virtual meeting where shareholders will vote on the proposed sale to Air Canada. In a release shortly after 9am, Transat confirmed that late last month it received an unsolicited proposal from a private investor, who the airline describes as "not actively involved in the airline and tourism industries." Transat said it went ahead and granted the suitor access for a due diligence review, but ultimately decided the proposal was not superior to Air Canada's $5.00/share offer. Shareholders voted to support the Air Canada transaction late this morning. But the story isn’t done: regulatory approval is still required.
IEA WARNS ON 'BLEAK' DEMAND OUTLOOK
The International Energy Agency has once again cut its oil demand forecasts, adding some circumspect perspective to a market that has sent crude prices on a remarkable rally since the start of November. While the IEA’s downward revisions are relatively marginal (50 kb/day this year, 170 kb/day for 2021), they underscore the industry’s fragile outlook as the pandemic drags on. The watchdog today warned of a ‘bleak’ demand outlook among OECD nations and pinpointed continued weakness in the aviation sector as a persistent drag on demand into next year.
CHINA RECOVERY
The country’s economy picked up steam in November, according to an overnight data dump showing an acceleration in industrial production, retail sales and the closely-watched bucket of fixed-asset investment. It’s the latest evidence that China is separating itself while much of the western world continues struggling with COVID-19 and helps explain why the IEA pinpointed the country as a source of strength for oil demand.
IN CONVERSATION WITH VICTOR DODIG
The chief executive officer of Canadian Imperial Bank of Commerce joins us this morning as part of our Future of… series exploring the lasting impact of COVID-19 on the economy, business and the way we work. Don’t miss our discussion with Victor Dodig shortly after 10 a.m. ET. We’re also looking forward to discussing the future of tourism at 10:30 a.m. ET with Banff Mayor Karen Sorensen and the outlook for workplaces with Open Text CEO Mark Barrenechea at 10:40 a.m. ET.
OTHER NOTABLE STORIES
-Our Bloomberg News partners are reporting CI Financial is among the potential bidders to acquire Wells Fargo’s asset management arm. According to the report, bids for the unit – which could fetch more than US$3 billion – are due this month.
-TC Energy has struck a friendly $1.68-billion arrangement to take full control of TC PipeLines LP. After initially offering 0.65 of a share for each of the master limited partnership’s units in October, TC Energy got the deal done at a sweetened exchange ratio of 0.7 share per unit.
-Norbord is restarting a Chambord, QC mill in response to booming demand for oriented strand board. Approximately 120 employees will be needed once production resumes early next year. The facility has been sitting dormant since it was acquired by Norbord in 2016.
-Kinaxis is facing allegations of patent infringement. The Canadian software firm said in a release last night it will “vigorously” defend itself, albeit while acknowledging it doesn’t have any details on the claims made by rival Blue Yonder in a Texas district court.
NOTABLE RELEASES/EVENTS
-Notable data: Canadian housing starts, Canadian existing home sales, Canadian manufacturing sales; China industrial production, retail sales
-Notable earnings: Fire & Flower Holdings
-10:00 a.m. ET: Transat A.T. virtual shareholder meeting for vote on takeover by Air Canada at $5.00 per share
-11:30 a.m. ET: Prime Minister Justin Trudeau makes announcement in Ottawa alongside Public Services and Procurement Minister Anita Anand, Chief Public Health Officer Theresa Tam, Deputy Chief Public Health Officer Howard Njoo, Major-General Dany Fortin
-1:00 p.m. ET: Canada Revenue Agency holds briefing on claiming home office expenses on 2020 tax return
-1:00 p.m. ET: Ontario Premier Doug Ford leads provincial update on COVID-19 vaccine roll-out
-2:30 p.m. ET: Bank of Canada Governor Tiff Macklem delivers speech ("Trading for a Sustainable Recovery" to Greater Vancouver Board of Trade (plus 3:45 p.m. ET media avail)
-Husky Energy and Cenovus Energy hold virtual meetings to vote on proposed deal (1100 and 1500 respectively)
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.
