Noah Zivitz

Managing Editor, BNN Bloomberg

Archive

Now what? That's the basic question we'll explore after Rogers Communications' $20-billion takeover of Shaw Communications was thrown into doubt after the companies announced the Competition Bureau is seeking to block their transaction. The opposition is despite Rogers' plan to sell Shaw's Freedom Mobile wireless business, which begs questions about whether the speculated buyers (and self-professed suitors, like Anthony Lacavera’s Globalive) haven’t been up to par in the eyes of the regulator. We'll chase insight on what investors can expect as the antitrust process unfolds, how Rogers and Shaw might attempt to convince regulators to let the deal go ahead, and what this means for anyone with a stake in Rogers or Shaw.

MARKETS ON EDGE

Selling pressure resumed this morning across major global indices, with virtually all of the major Asian and European markets falling and U.S. futures suggesting it will be more of the same when trading begins in North America. Central banks and China’s efforts to contain COVID-19 remain in focus. The former is evident as the U.S. dollar trades higher against every major currency this morning and as the U.S. 10-year treasury yield climbs to its highest level since November 2018. Back to China: its COVID strategy might help explain why oil prices are falling this morning despite the G7’s pledge yesterday to phase out or ban imports of Russian oil “in a timely and orderly fashion.”

TOBI LUTKE SLINGING ZINGERS

The chief executive of Shopify is taking some potshots at the analyst community. In a series of tweets yesterday evening, Lutke pondered whether analysts are “being held accountable” and suggested that saying a company beat against expectations “is just different framing form (sic) ‘analysts failed to accurately predict company X, Y’”. (A skeptic – particularly one who read Dave’s recent deep dive on skin in the game in boardrooms -  might flip this around and ask what’s being done to hold managements accountable, but I digress.) For the record, there are 26 buy recommendations on Shopify among analysts tracked by Bloomberg, as well as 17 holds and three buys. Also for the record: Shopify shares have plunged 77 per cent since mid-November.

DAVID DODGE SOUNDS OFF

The former Bank of Canada governor let a (mild) expletive fly in an interview that aired yesterday on CTV’s Question Period. On the subject of criticism levelled against the central bank by Conservative Party of Canada leadership candidate Pierre Poilievre, Dodge said “that’s bull----.” Read all about it here.

BIG DAY FOR SUNCOR

This is an earnings day unlike any other for the oil sands pioneer. After all, Suncor Energy is reporting with an activist investor breathing down its neck. It’s an opportunity to either demonstrate operational progress and push back on Elliott Management's calls for a boardroom overhaul and strategic review. Or, if Suncor shows any signs of having stumbled in the latest quarter, that could bolster Elliott's case for change. We'll set the scene ahead of what's expected to be a late-day release of Suncor's results. We'll point out here that Suncor is the third-best performing stock on the S&P/TSX Composite Index since Elliott went public with its activist campaign on Apr. 28, with a gain of 13 per cent. Over that past three years, however, its shares have gained a mere 10.7 per cent, compared to Canadian Natural Resources' 117.7 per cent surge.

OTHER NOTABLE STORIES

• SNC-Lavalin is proposing to pay almost $29.6 million to put one of its corruption affairs of yesteryear in the rear view. The Montreal-based engineering company said after markets closed Friday that it struck a remediation agreement with Quebec prosecutors over fraud and other charges relating to activities from 1997 to 2004. The remediation plan is subject to approval by the Quebec Superior Court at a hearing scheduled to begin tomorrow.
• First Quantum Minerals announced yesterday it’s going ahead with an expansion of its Kansanshi mine in Zambia, as well as the Enterprise nickel project. CEO Tristan Pascall said in a release the decision reflects his company’s “increased confidence in the investment climate in Zambia.” Capital expenditures are estimated at US$1.25 billion for the expansion and US$100 million for Enterprise.
• Capstone Infrastructure announced Pembina Pipeline has signed a power purchase agreement for a 192-megawatt wind farm that’s being developed in Alberta. Separately, an analyst at National Bank raised his price target on Pembina to $48 from $45 on the heels of last week’s results.
• Rivian Automotive shares have been down almost 10 per cent in pre-market trading after CNBC’s David Faber reported Ford is selling eight million shares in the Amazon-backed electric vehicle maker.

NOTABLE RELEASES/EVENTS

• Notable data: Canadian building permits, China trade balance
• Notable earnings: Suncor Energy, Ensign Energy Services, A&W Revenue Royalties Income Fund, CT REIT, Element Fleet Management, Hudbay Minerals, RioCan REIT, Boardwalk REIT, Ritchie Bros Auctioneers, Finning International, Ovintiv, Tyson Foods, AMC Entertainment Holdings, Novavax
• 1015: Ontario Liberal Party Leader Steven Del Duca announces campaign platform in Toronto
• 1330: U.S. President Joe Biden and Vice-President Kamala Harris deliver remarks at the White House on cost of high-speed internet
• 1530: House Standing Committee on Official Languages holds hearing “Importance of Official Languages at Canadian National”
• IIROC opens disciplinary hearing against Gary Ng in Vancouver