May 8, 2018
The Daily Chase: Shell selling stake in Canadian Natural Resources; one-on-one with Shopify's CEO
By Noah Zivitz
Royal Dutch Shell is unloading the massive stake in Canadian Natural Resources it picked up last year in exchange for its oil sands assets. The global supermajor announced late yesterday it will receive US$3.3 billion in exchange for the 97,560,975 shares, with proceeds going toward paying down debt. Some of the issues to consider:
-Why now? Probably has something to do with the fact Canadian Natural’s U.S.-listed shares have rallied 12 per cent over the last year
-Testing the market. Goldman Sachs, RBC Capital Markets, Scotia and TD Securities are now tasked with finding buyers for the 97.6 million shares that will be sold at a discount to yesterday's closing price. The secondary offering is expected to close tomorrow. We'll gauge investor appetite.
VALEANT NO MORE
The Quebec-based drugmaker announced today it will change its name to Bausch Health Companies in July. It’s an attempt to wipe the slate clean, at least for branding purposes, after a harrowing couple of years. This gives us a great opportunity to reflect back on how Valeant flamed out and look ahead to what the future holds, particularly on a day when the company is raising its full-year revenue and adjusted profit forecasts.
IN CONVERSATION WITH TOBI LUTKE
It's a rare occurrence: one-on-one with the founder and CEO of Shopify. And you'll only see it today on BNN Bloomberg. Tobi Lutke shares his views on investor expectations, Amazon, Shopify's growth outlook, and gives a glowing seal of approval to doing business in Canada. Don't miss it this afternoon on Bloomberg Markets.
NEVSUN IN PLAY
Lundin Mining and Euro Sun Mining went public late yesterday with their attempt to acquire Nevsun Resources. The two companies said they tabled a proposal to buy the miner for $5.00 per share in cash and stock, but were turned away by Nevsun. Lundin has evidently been leading the charge, saying in a release it brought Euro Sun into the fold after being rebuffed three times with approaches of its own. It’s by no means giving up, saying the would-be buyers “believe strongly that the proposal should be shared with all Nevsun shareholders.” We’ll chase principals.
IN CONVERSATION WITH JAMIE DIMON
Our Bloomberg partners caught up with America’s most powerful banker for an exclusive interview. Watch for highlights from that chat with Jamie Dimon throughout the day on BNN Bloomberg.
TRADERS AWAIT TRUMP’S DECISION
The price of oil has slipped back below US$70 per barrel ahead of the U.S. President’s scheduled remarks this afternoon on the future of the Joint Comprehensive Plan of Action, which provided sanction relief to Iran in exchange for curbs on its nuclear program. Trump will deliver his remarks at 2:00 p.m. ET.
OTHER NOTABLE STORIES
-We'll keep an eye on shares of Citigroup today after The Wall Street Journal reported activist investor ValueAct Capital Partners has amassed a $1.2-billion stake in the big U.S. bank.
-We’ve got some richer dividends this morning. George Weston is boosting its quarterly payout to 49 cents per share from 45.5. Quebecor is doubling its dividend to 5.5 cents from 2.75 (also some notable news from the telecom conglomerate this morning, with a multi-pronged agreement to repurchase Quebecor Media shares owned by the Caisse).
-The Canadian dollar sagged as low as 77.01 cents U.S. in early trading. Last time it traded below 77 was March 21.
-Nutrien and Mosaic both called out rail companies for hindering their performance in the first quarter. Nevertheless, Nutrien and Mosaic are raising their full-year profit forecasts.
-The Ontario legislature is expected to be dissolved today before the writ drops tomorrow, officially launching the provincial election campaign. We’ll ramp up coverage of what the three leaders are saying about hydro, housing and fiscal planning in the lead up to June 7.
-There are multiple reports that Comcast is planning a rival bid for 21st Century Fox's entertainment assets, which Walt Disney Co. previously agreed to buy for US$52 billion.
NOTABLE RELEASES/EVENTS
-Notable earnings: Home Capital Group, WestJet, Valeant Pharmaceuticals, Kinross Gold, George Weston, Spin Master, Quebecor, Sun Life Financial, Intact Financial,
TransAlta, Exchange Income, Walt Disney Co.
-Notable data: Canadian housing starts
12:00 p.m. ET: Alberta Environment Minister Shannon Phillips to announce Oil Sands Innovation Challenge funding recipients
-12:00 p.m. ET: WestJet holds annual meeting Calgary
-1:30 p.m. ET: Parliamentary Budget Officer Jean-Denis Frechette testifies before Senate National Finance Committee
-2:00 p.m. ET: U.S. President Donald Trump announces decision on Joint Comprehensive Plan of Action (IE, Iran sanction relief)
-3:55 p.m. ET: Justin Trudeau demos Shopify technology in Toronto (photo op)
-4:15 p.m. ET: Trudeau in armchair discussion with Tobi Lutke in Toronto
-Google's two-day I/O developer conference begins in Mountain View, CA
Every morning BNN'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.
