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from Breakingviews:

Bankers get painful and needed conflicts reminder

By Reynolds Holding

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Bankers just got handed a painful, and necessary, reminder about conflicts of interest. A $76 million penalty against RBC Capital Markets for working both sides of a deal is the latest blow to skewed loyalties. Even with recent knocks against Goldman Sachs and Barclays, however, it isn’t clear the message is reaching Wall Street.

The facts are depressingly familiar. While advising ambulance operator Rural/Metro on its $440 million sale in 2011, RBC was also pitching to finance the buyer, private equity firm Warburg Pincus. Delaware Vice Chancellor Travis Laster ruled in March that the lure of loan and advisory fees – and the potential for touting the transaction to win similar clients – led the bank to advocate a lowball offer. Rural/Metro shareholders, the judge said last week, deserved an extra $76 million.

Barclays ran into similar trouble in 2011 when Laster ruled the UK-based bank had a conflict advising Del Monte on a sale while also financing the buyers. The bank and Del Monte paid some $90 million to settle. And in 2012, Goldman coughed up its $20 million fee for helping pipeline operator El Paso sell itself to Kinder Morgan. Turns out Goldman owned a $4 billion stake in the buyer, which then-Chancellor Leo Strine found “furtive” and “troubling.”

from Breakingviews:

Sears’ Canada stake sale merits a discount

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Eddie Lampert is at it again. Less than three weeks after the hedge fund world’s Icarus figure-turned-retail boss announced he would lend Sears Holdings $400 million, the struggling store chain has announced a plan to raise more cash by selling down its stake in a Canadian subsidiary through an uncommon operation.

from Breakingviews:

Buffett and tax outrage both diversions in BK deal

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Warren Buffett’s name is giving Burger King’s deal to buy Tim Hortons, now worth some $11 billion, a public relations boost. But some commentators on Twitter are calling the Berkshire Hathaway boss a hypocrite and branding him unpatriotic for supporting a company moving from the United States tax jurisdiction to Canada. Both sentiments are diversions.

from Breakingviews:

Burger King tax flip merger logic doesn’t stack up

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

It will take more than a crossing of the Canadian border to justify investor ebullience for a potential Burger King-Tim Hortons combination.

from Breakingviews:

Why can Burger King, but not Wendy’s, own Hortons?

By Rob Cox

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Why can Burger King, but not Wendy’s, own Tim Hortons? Burger King used to argue that it was exceptional for the flame-broiling of its burgers. With its $11 billion purchase of the Canadian doughnut-chain, its shareholders seem to believe it is special in some other ways.

from MacroScope:

Canada housing: This time it’s different, eh

AResults are in from the latest Reuters poll on Canada’s rampant property market from economists and market analysts, and the message is everything’s fine.

Prices will rise gradually over the next few years and there is very little risk of a crash.

from Breakingviews:

Cross-border arbitrage is expansive Bimbo’s yeast

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Cross-border arbitrage is the yeast for Grupo Bimbo’s aggressive expansion. In its latest deal north of the border, the acquisitive Mexican breadmaker is shelling out $1.8 billion to buy Canada Bread. Paying 20 times earnings to move into a mature market may seem questionable. But Bimbo’s earnings fetch an even higher multiple at home – and the deal should lower its weighted average cost of capital.

from MacroScope:

The Bank of Canada is probably not ready to seriously consider cutting rates — yet

With all signs showing the Canadian economic miracle is fading, the Bank of Canada is understandably starting to sound more dovish. The Canadian dollar has got a whiff of that, down about 10 percent from where it was this time last year.

But that doesn't mean Governor Stephen Poloz is ready to signal on Wednesday that his rate shears are about to get hauled out of the shed.

from Photographers' Blog:

The last theater in town

Powell River, Canada

By Andy Clark

As far back as I can remember, history has always fascinated me. Though my specialty as an amateur historian has been military history, just about anything that occurred prior to my birth has had my undivided attention. Recently while having a coffee with a friend, he mentioned he had been to a town north of Vancouver called Powell River and had happened to visit a local movie theater. He went on to say matter of factly, that the theater had been continuously running since it was built many years ago.

“Stop right there,” I said. “Did you take any pictures of the place?” Yes, he had and he pulled out his laptop to show me.

from Breakingviews:

Lenovo-BlackBerry bid could squish under pressure

By John Foley and Ethan Bilby

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Lenovo is wading into the BlackBerry jam. The Chinese technology group has gained access to the books of the Canadian smartphone seller, which is already considering a $4.7 billion approach from shareholder Fairfax Financial Holdings. If it chose to bid, Lenovo would have to do better than the current offer of $9 per share, and overcome more obstacles.

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