Here are five things you need to know this morning:
Big settlement for Big Tobacco: Major global tobacco companies are close to a deal that would settle long-standing legal issues in Canada, with Big Tobacco poised to pay more than $32 billion to various governments and smokers themselves to settle claims they lied about the health risks of their products for decades. Parts of the legal case have been winding their way through the court system since 1998, and many of the Canadian units of tobacco companies involved have since entered bankruptcy proceedings largely because of the looming cost of this settlement. But under a plan proposed by a court-appointed mediator, they’ll pay almost $25 billion to federal and provincial governments to recoup health care costs. Surviving members of two class action lawsuits in Quebec dating back to 1998 are also poised to get more than $4 billion. The exact breakdown of who will pay what to who and when depends on various stakeholders agreeing, but the plan would “resolve all Canadian tobacco litigation and provides a full and comprehensive release,” British American Tobacco said in a statement.
Dubai-based PE firm seeking exit for Tim Hortons Gulf stake: Dubai-based private equity group Gateway Partners is looking to sell its 40 per cent stake in Tim Hortons operations in the Persian Gulf. Bloomberg is reporting that the PE firm is working with BNP Paribas on the sale of its stake in the business that owns 338 Tim Hortons franchises across Saudi Arabia, the UAE and India. Gateway paid US$50 million for its share of the business only four years ago, and the number of locations in Dubai has doubled since it first set up shop, but Gateway wants out. Citing anonymous sources, Bloomberg says non-binding bids are expected in the coming weeks.
Netflix keeps adding customers: Netflix shares are streaming higher this morning after the company posted quarterly results after the bell on Thursday that beat expectations on just about every metric. Netflix added 5 million new customers during the period, beating the forecast of 4.52 million, while sales grew by 15 per cent to almost US$10 billion. Netflix shares were a big loser in 2022, when growth slowed, and the market feared things had reached saturation. But the company’s crackdown on password sharing and introduction of cheaper ad tiers seems to have kept the party going, as the stock has quadrupled since troughing out roughly two years ago.
CVS axes CEO: U.S. retail and pharmacy chain CVS has announced some major news, ending the tumultuous tenure of Karen Lynch at the top of the company and naming longtime exec David Joyner to take over. In a regulatory filing Friday morning, CVS said Lynch was replaced on Thursday. That brings an end to her tenure, a time that has seen the company repeatedly miss earnings expectations, drawing the attention of activist shareholders pushing for change and setting off unrest among regular investors. CVS has already warned that its forthcoming Q3 results are also going to miss, so Joyner will be trying to find the bottom to build off. The shares are down by 14 per cent in premarket. That’s on top of the almost 20 per cent decline they’ve clocked this year, a time when the market overall has risen by that much and more.
Gold price tops US$2,700: The price of gold is setting new record highs this morning, topping US$2,700 an ounce for the first time. Declining interest rates around the world have been bullish for gold, making the precious metal more attractive compared to yield-producing investments. And geopolitical tensions also tend to push up the price of bullion, which is very much a factor in the current bull run.