Reuters News

U.S. hedge fund Paulson & Co is set to name a group of activist investors that will work together to try to drive changes and better returns from gold mining companies after years of dismal industry performance, sources told Reuters. The Canadian gold-mining index has lost 40 percent of its value in the past decade, compared with a 9 percent gain in the benchmark TSX index and a 95 percent rise in the S&P 500. Gold has risen 46 percent in the same period. The alliance is unusual because there is no similar group of investors targeting a specific sector, activism experts say.

Leverage levels for buyouts are close to pre-credit crisis levels as banks are more willing to underwrite highly leveraged deals following the Office of the Comptroller of the Currency’s softened stance towards lending risk, Reuters reported. So far during Q2 2018, leverage for U.S. buyouts averages 6.57 times, the highest level since it reached 6.65 times during Q3 2014. Leverage at this level had not been seen before that since 2007, before the credit crisis hit when leverage on buyouts topped out at 6.8 times on average.

India’s Reliance Communications expects to complete its asset sale to Reliance Jio Infocomm and Canada’s Brookfield Asset Management in coming weeks, after the bankruptcy appeals court halted insolvency proceedings against the debt-laden company, Reuters reported. The US$2.7 billion sale of wireless assets will include airwaves and mobile masts to Jio and Brookfield. Like other established Indian telecom companies, RCom has been hit by a fierce price war over the last year. It shut its mobile operations late last year.

Canada’s biggest public pension funds could be long-term buyers of Kinder Morgan Canada Ltd’s Trans Mountain pipeline but are unlikely to invest until the $7.4 billion project has been built, several sources told Reuters. Frank McKenna, Toronto-Dominion Bank’s deputy chairman, said he expected pension funds and private equity players to be interested in the asset as well as other pipeline or infrastructure players. “I think there will be a lot of private sector interest in this project once the political risk is taken out of it,” he said.

Ottawa will buy Kinder Morgan Canada Ltd’s Trans Mountain pipeline for $4.5 billion in hopes of saving the project that faces formidable political and environmental opposition, Reuters reported. Finance Minister Bill Morneau said purchasing the pipeline was the only way to ensure that a planned expansion could go ahead. Ottawa backs plans to boost capacity of the line to a Vancouver-area port so Canadian crude gets greater access to foreign markets. Earlier this year, Caisse de dépôt et placement du Québec disclosed a 7.8 percent stake in Kinder Morgan Canada.

A consortium led by Swiss asset manager Partners Group Holding will buy Techem from Macquarie in a deal that values the German metering company at an enterprise value of 4.6 billion euros (US$5.4 billion), Reuters reported. The buyers include Caisse de dépôt et placement du Québec and Ontario Teachers’ Pension Plan as well as Techem’s management team. They plan to further develop the company, which supplies energy invoicing and energy management in buildings, in existing markets and expand into new geographic markets.

The sale of U.S. private equity firm ArcLight Capital Partners’ North Sea Midstream Partners (NSMP), an oil and gas pipeline business, could be hit by renewed U.S. sanctions on Iran, sources told Reuters, as one of its major clients is part-owned by the Iranian Oil Co. Parties interested in NSMP include Canada's OMERS Infrastructure which has teamed up with Macquarie, JP Morgan, Canada Pension Plan Investment Board and KKR, which is working with BlackRock, the sources said. It was not clear whether they had bid. ArcLight initially created NSMP in 2012 to invest in the midstream sector of the North Sea’s oil and gas industry.

Global mergers and acquisitions have already reached US$2 trillion in 2018, a record for the value of deals in the period, Reuters reported, citing Thomson Reuters data. A flurry of deals at the start of the week, particularly in the United States with the US$11.1 billion merger of GE’s transportation business and rail equipment maker Wabtec, helped reach the milestone. The last two periods when M&A reached similar levels were in 2007 (US$1.8 trillion), a year before the financial crisis and in 2000 (US$1.5 trillion), just before the bursting of the dot.com bubble of technology and internet-related stocks.

Australian hospital group Healthscope Ltd rejected two takeover approaches this week and said it will instead explore selling its properties, in what analysts called a risky move that could invite a more favourable takeover bid, Reuters reported. The Melbourne-based company said both US$3 billion-plus offers, from Canada’s Brookfield Asset Management and jointly from local private equity firm BGH Capital and 14 percent shareholder AustralianSuper, were conditional and undervalued the business. Reuters last month reported Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan were partnering with BGH in its Healthscope bid.