The Globe and Mail - 25.11.2019

BUSINESSCLASSIFIED

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DIVIDENDS

Dividends

Notice is hereby given that the following dividend has been declared.

Issuer Issue RecordDate PayableDate Rate

Crown Point Common December 2, 2019 December 9, 2019 $0.185 US

Energy Inc.

B2| REPORTONBUSINESS OTHEGLOBEANDMAIL | MONDAY,NOVEMBER25,2019

LVMH is close to buying U.S. jew-
ellery chainTiffany & Co.for
about US$16.3-billion after sweet-
ening its offer, sources said on
Sunday, as the owner of Louis
Vuitton and Bulgari aims to tap
the fast-growing luxury jewellery
market.
The two sides are close to an
agreement after the French luxu-
ry goods company raised its offer
price for the company known for
its engagement rings and ties to
Hollywood glamour to US$135 for
each share, sources familiar with
the matter said.
The boards of both companies
will be presented with the terms
of the deal on Sunday, one source
said.
A deal could be announced lat-
er on Sunday or on Monday, two
other sources said.
It would be LVMH’s largest
takeover.
The new price is up from
US$130 last week and US$15 high-
er than the original all-cash offer
delivered to Tiffany by LVMH ma-
naging director Antonio Belloni
on Oct. 18.

It represents a 7.5-per-cent pre-

mium over Tiffany’s closing share

price on Friday and is more than

50 per cent higher than where the

price stood before LVMH

launched its effort to woo the

company.

The two companies did not im-

mediately respond to requests for

comment.

Aside from the price tag, the

terms are not known.

LVMH, owned by Europe’s

richest man, Bernard Arnault, has

eyed the company for years after

buying Italy’s Bulgari in 2011 for

€3.7-billion, at the time the large-

st luxury goods deal in a decade.

Tiffany will help expand its

smallest business, give it a bigger

share of the lucrative U.S. market

and expand in jewellery, the fas-

test-growing sector in the luxury

goods industry.

Known for its signature robin’s

egg blue packaging, Tiffany re-

buffed LVMH’s initial advance

made just five weeks ago, arguing

it significantly undervalued the

company.

Reuters reported this week

that LVMH had persuaded Tiffany

to provide it with confidential

due diligence after it raised its bid

to US$130 a share, worth almost

US$16-billion.

The news of Sunday’s boosted

offer was first reported by the Fi-

nancial Times.

Tiffany, founded in New York

in 1837 and featured in the 1961

movieBreakfast at Tiffany’sstar-

ring Audrey Hepburn, had strug-

gled with falling annual sales and

profit since 2015, before a revenue

turnaround in 2017.

Jewellery was one of the stron-

gest performing areas of the luxu-

ry industry in 2018, according to

consultancy Bain & Co., which

forecast that comparable sales in

the US$20-billion global market

were set to grow 7 per cent this

year.

Under chief executive Alessan-

dro Bogliolo, former head of fash-

ion firm Diesel and a Bulgari

alumnus, Tiffany has been build-

ing up its e-commerce business

and is trying to court younger

shoppers with more affordable

pendants, earrings and new

designs.

REUTERS

LVMHnear$16.3-billionTiffanydeal,sourcessay

Purchaseannouncement

expectedbyMonday,

givingFrenchcompany

strongpositioninhot

luxuryjewellerymarket

GREGROUMELIOTIS

TheboardsofFrench

luxurygoodscompany

LVMHandU.S.jeweller

Tiffany&Co.weresaid

tobevettingthetermsof

asalesagreementon

Sundaywithan

announcement

imminent.GONZALO

FUENTES/REUTERS

A CN spokesperson said the
company remained optimistic it
could reach a deal and continues
to call for binding arbitration.
The railway is currently running
at 10 per cent of its capacity.
The federalgovernment reit-
erated its position that the two
parties should reach a deal on
their own rather than through a
government-mandated process.
“Our government believes in the
collective bargaining process,”
said Labour Minister Filomena
Tassi in a statement Sunday.
But representatives of indus-
tries heavily affected by the
strike say they need a solution
very soon.

“We’re frustrated with the fed-
eral government,” Bob Master-
son, CEO of the Chemistry Indus-
try Association of Canada, which
represents chemical manufactur-
ers. “People will soon be fur-
loughed and out of work when
chemical facilities shut down,
which is close because there’s
nowhere left to store their prod-
uct or they’re not receiving in-
puts.”
Mining Association of Canada
spokeswoman Cynthia Wald-
meier said an unspecified num-
ber of mining operations “could
start to shut down this week”
due to the strike, while two West-
ern Canadian operations that re-
ceive crude oil for rail ship-
ments, TORQ Energy Logistics
and Altex Energy, said they were
running out of storage space,
Bloomberg reported.
Meanwhile, some grain hand-
ling operators across Ontario in-
formed farmers they could no
longer take their corn because
they had run out of propane –
which is shipped from the west
by rail through Sarnia, Ont. – to

dry out the harvested crops so

they won’t rot in container bins.

“For those elevators that run

on propane it’s a crisis,” said Da-

vid Buttenham, CEO of the Onta-

rio Agri Business Association. He

added the situation is exacerbat-

ing what has been a tough year

for corn farmers, who had to de-

lay planting due to wet spring

conditions and who still have yet

to harvest most of their crops.

Winnipeg grain handling giant

Parrish & Heimbecker Limited

informed customers on Saturday

it could no longer accept corn at

two Ontario grain elevators.

Some operators that had previ-

ously closed reopened to receive

corn on the weekend – including

Maxville, Ont.’s MacEwen Agri-

centre – but warned that could

be temporary if propane short-

ages continue.

“We hope something will get

settled this week,” said Eric Met-

calfe, operations manager with

MacEwen, which serves hun-

dreds of area farmers. “We have

room for another day or so [of

corn] until we have to shut

again.”

“This can’t wait for weeks,”

said Kevin Klippenstein, chief fi-

nancial officer of grain company

Parrish & Heimbecker.

“At some point there will be

an impact on employment be-

cause when you have locations

that can’t receive or ship grain,

then your employees aren’t do-

ing anything. And for the farm-

ers that are relying on this cash

flow to pay their bills, it will take

months to recover from a stop-

page.”

Conservative MP John Barlow

of the Foothills riding of Alberta

said the government “clearly

doesn’t understand the crisis this

strike is causing throughout the

economy.” He called on the gov-

ernment to reconvene Parlia-

ment and noted railway employ-

ees have been legislated back to

work in the past.

But NDP House Leader Peter

Julian urged thegovernment not

to legislate employees back to

work. “If the government has a

pressure point it should be to get

a successful conclusion to collec-

tive bargaining.”

With a report from TheCanadian

Press

CN:Industryrepresentatives

saytheyarefrustrated

withfederalgovernment

FROMB1

Some grain handling

operators across Ontario

informed farmers they

could no longer take

their corn because they

had run out of propane

• which is shipped from
  the west by rail through
  Sarnia, Ont.

“While we don’t expect these issues to be read-

ily apparent in Scotiabank’s fourth-quarter re-

sults, any indications of an impact on the out-

look would be of interest,” he said

Scotiabank is also expected to turn in rela-

tively weak results from its capital markets op-

erations, reflecting an industry-wide decline in

revenue from trading and stock and bond un-

derwriting. Across all the Canadian banks, prof-

its from capital markets activity are expected to

fall by 6 per cent, year over year.

Canada’s banks added $525-

million to loan loss provisions

through the first nine months of

2019.

“We believe this pace of addi-

tions will be maintained during

upcoming fourth-quarter results,

if not accelerated, reflecting on-

going challenges posed by global

trade tensions, low oil prices, ris-

ing personal bankruptcy rates

across Canada and weakening do-

mestic GDP forecasts,” National

Bank’s Mr. Dechaine said.

Analysts highlighted the po-

tential for an upward spike in

problem loans to energy companies, including

Canadian companies that are pushinggovern-

ments to build new pipelines. There are also

concerns over rising problem loans to farmers,

who have lost access to markets such as China

because of trade disputes.

Bank of Montreal is aggressively expanding

its commercial loan business and Mr. Dechaine

said, “We expect some scrutiny of credit per-

formance in this portfolio, especially in the oil

and gas and agricultural portfolios.”

There are bright spots in the outlook for Can-

ada’s banks.

Three months ago, BMO and Toronto-Do-

minion Bank surprised investors with financial

results that included lower-than-expected

profits from their U.S. operations. This was

largely because of tighter margins between in-

terest rates on loans and what the banks paid

clients for deposits, as the U.S. Federal Reserve

cut interest rates three times. Since then, the

U.S. interest rate environment has improved

for banks, and that could translate into better-

than-anticipated results in 2020.

“The U.S. business backdrop

remains supportive in terms of

loan growth and credit quality,”

Mr. Dechaine said. “If ever a U.S.-

China trade deal emerges, we be-

lieve a coiled spring effect could

emerge for U.S. banks.”

BMO, National Bank and Lau-

rentian Bank of Canada are ex-

pected to raise their common

share dividends when they an-

nounce financial results, accord-

ing to several analysts.

All of Canada’s banks are rela-

tively flush with capital and anal-

ysts expect management teams

will continue to devote cash to share buybacks

rather than takeovers. Over the past 12 months,

the banks repurchased $4.9-billion of their own

stock. The last major acquisition in the sector

played out 18 months ago, when Scotiabank ac-

quired wealth manager MD Financial for $2.6-

billion.

Scotiabank’s Mr. Malhotra said deal-making

is expected to remain muted because of “in-

creased consideration of acquisition risk at lat-

er stage in the economic cycle.”

Banking:Industryseeingdecline

inprofitsfromcapitalmarkets

FROMB1

Analysts highlighted

the potential for an

upward spike in

problem loans to

energy companies,

includingCanadian

companies that are

pushing

governments to

build new pipelines.

Several factions of Argentina’s bondholders

are jostling for influence ahead of restructur-

ing talks with incoming president Alberto Fer-

nandez as Latin America’s third-largest econo-

my tries to avert a default, more than a dozen

sources familiar with the process said.

Argentina is once again buckling under the

weight of its sovereign debts, which total

around US$100-billion, and Mr. Fernandez

needs to urgently agree to a deal with creditors

to ease the burden andgive hisgovernment

space to try to revive the economy.

Several investors say they are growing in-

creasingly annoyed by a lack of clarity on the

plans of the newgovernment, which is set to

take over on Dec. 10. Mr. Fernandez has not yet

named his economic team or said how he will

deal with the debts, which have become pain-

fully costly after a collapse of the peso.

“The general frustration is how slow the in-

coming administration has been to name peo-

ple and get the ball rolling,” a source at a large

fixed income investor that holds Argentine

debt said, adding that with more clarity things

could change “fairly quickly”.

Mr. Fernandez this week told the Interna-

tional Monetary Fund’s head Kristalina Geor-

gieva he has a “sustainable” plan to meet cred-

itor obligations as well as maintain growth,

without giving details.

A creditor committee of at least 20 mem-

bers was formed last month as bondholders

look for ways to avoid losses, which could re-

ach tens of billions of dollars, on their hold-

ings.

A second group is now being assembled, led

by U.S.-based emerging-markets-focused in-

vestment manager Gramercy, three sources

said, amid differences over the way forward.

A third group of mostly hedge funds hold-

ing bonds restructured after a prior Argentine

default was also being brought together, sourc-

es said.

Gramercy has previous experience in Ar-

gentina, where its distressed debt chief invest-

ment officer Robert Koenigsberger was in-

volved in debt talks in 2009.

Several bondholders said a range of propos-

als for bundling creditors were circulating, al-

though some said they would rather stick to a

larger single group controlling a bigger debt

slice.

The process of organizing creditors is still in

the early stages and it is not clear how much of

Argentina’s debt each grouping represents at

this stage. Gramercy’s proposal, which also in-

volves emerging markets investment manager

Macrosynergy Partners, has put together a

number of possible scenarios, three sources fa-

miliar with the plans said.

The last major default by Argentina in 2001

tipped the country of 44 million people into

years of recession and economic crisis from

which it only emerged in 2015.

Argentine bonds, almost 80 per cent of

which are denominated in foreign currency,

were given a small lift by Mr. Fernandez’s com-

ments this week, but they are still trading at

less than half their face value.

And the peso is the world’s worst perform-

ing currency this year, despite being propped

up by capital controls put in place in Septem-

ber, weeks after Mr. Fernandez’s shock victory

in a primary election sparked financial market

panic.

REUTERS

Argentinacreditorsjockeyforlead

aheadofdebttalkswithnewpresident

CASSANDRAGARRISON