Here are five things you need to know this morning:
Couche-Tard gets vote of confidence from 7-Eleven shareholder: Instead of going ahead with a ‘too little, too late’ plan to restructure itself, 7-Eleven owner Seven & i Holdings should enter into negotiations with Canada’s Couche-Tard to hammer out a deal for the convenience store chain. So says Artisan Partners International Value Team in a letter to Seven & i published Wednesday. Artisan is a major owner of Seven & i’s shares, so their opinion holds a lot of sway and ratchets up the pressure on the Japanese company. Couche-Tard first floated the takeover plan in August but has been rebuffed every step of the way. Last month, Seven & i announced a plan to effectively split itself in two so it can focus on its core asset, 7-Eleven, but that isn’t what’s best for shareholders, Artisan says. “The price currently being offered by Couche-Tard is clearly superior to the speculative value that could potentially be achieved by implementing the restructuring plan at this late date,” Artisan said in the letter. The market seems to agree. Seven & i’s Nikkei-listed shares are stuck at around US$18. That’s 20 per cent above Couche-Tard’s initial offer, but still well below the most recent sweetened one, which shows the market’s skepticism that it’s going to happen. It’s also 50 per cent higher than what the company was worth before this whole saga began.
Barrick misses on volumes: Gold miner Barrick reported fresh sales and production numbers this morning; data that missed analyst expectations on both fronts. The company sold 967,000 ounces of gold during the third quarter. That’s down by almost six per cent and short of analyst expectations for more than 1 million. On the production side the output was even lower, at just 943,000 ounces, and also short of expectations of 1.02 million. The company put a positive spin on the outlook moving forward however, noting that it expects a “materially stronger Q4” that will allow it to achieve its previously announced full year guidance range.
Lithium Americas shares pop premarket: Shares of Lithium Americas will be one to watch today after the Vancouver-based company announced a joint venture with automaker General Motors. GM will spend US$625 million for a 38 per cent stake in the miner’s Thacker Pass project in Nevada. The investment effectively doubles GM’s commitment to Lithium Americas. Lithium is a major component of batteries for electric vehicles and other devices and while prices for the metal have eased from multi year highs, automakers are scrambling to secure long-term supplies.
First-of-its-kind Indigenous investment dealer up and running: There’s a fascinating new startup to monitor on Bay Street this morning as Canada now has its first Indigenous-owned investment dealer. Cedar Leaf Capital has gotten the OK from OSFI, the OSC and other regulators to operate and plans to do so later this month, Bloomberg reports. Cedar Leaf is majority-owned by three Indigenous shareholders — Nch’kay Development Corp., Des Nedhe Group and Chippewas of Rama First Nation — while Bank of Nova Scotia controls the remaining 30 per cent, although it plans to slowly divest its stake. The startup’s initial focus will be on debt capital markets, CEO Clint Davis, an Inuk from Labrador with a background in finance and public service, told Bloomberg in an interview.
Housing starts still well below needed pace: Two things can be true at the same time: The pace of new home construction was faster in September than it was in August — but the pace of new building is still well short of where we need it to be. That’s the main takeaway from new housing starts data released from the CMHC this morning; numbers that showed the monthly seasonally adjusted annual rate was to 223,808units. That’s up from the 213,012-unit-pace in August, but it’s still woefully short of the pace we need to see to keep up with expected demand. Policy makers suggest home construction needs to be more than 1 million units above and beyond the current pace, and that’s just not happening. “Despite the increase in housing starts in September, we remain well below what is required to restore affordability in Canada’s urban centres,”CMHC’s deputy chief economist Kevin Hughes said in a release.