Bonuses, Questions And Your Vote
Here are three things we thought You Should Know today about investment banker bonuses, feedback on our CEO presentations - and we’d like to hear your vote on the proposed Glencore takeover of Teck Resources.
1.Slim pickings for investment bankers: The IPO market remains in a deep freeze in Canada, and with it, the bonus pool for investment bankers at the major dealers. At least for now.
According to tables released by Canaccord Genuity, as of March 31st only one IPO of more than $10 million has been closed this calendar year. Lithium Royalty (LIRC-T $16.00 Mkt Cap $400 million) closed on a $150 million IPO at $17 per share on March 15th. The Canaccord tables slide excludes Capital Pool Companies (CPCs) and Flow-Through Limited Partnerships / structured products.
2. Ten questions: Our team of VPs covers more than 1,000 Investment Advisors, hedge fund managers and family office CEOs across 28 cities in Canada and the UK/Europe.
After every single meeting that we organize for our pubco clients, here are the Ten Key Questions that we ask our audience, and deliver this honest, timely and very helpful feedback to our CEOs:
Did this presentation meet your expectations?
Was management clear in their presentation?
Is the business model clear? Does it make sense?
What are the strong takeaways from this story?
What did you like about it?
What are the challenges, major risks or downside you see?
Is the blue-sky opportunity clear?
Is this a fit for any of your clients?
If not now, would you put it on your radar screen?
Have we missed anything?
3. Glencore vs. Teck - what’s your vote? On Monday, Switzerland’s Glencore tabled a $231 billion "proposed Teck merger and coal demerger" that would see Canada’s second largest mining company (Nutrien is first) fall into foreign hands.
Teck’s been under pressure since a February restructuring plan when it announced a spin-out of its metallurgical coal division into newly listed Elk Valley Resources, in exchange for a minimum $14 billion cash royalty over 11 years. The Keevil family promised to do away with Teck’s dual class structure, which gives the family total control over Teck, in six years if the Elk Valley plan is approved. Glencore’s offer states that immediately upon closing, it would spin off all of Teck’s coal assets and focus on moving forward as one of the world’s largest copper producers. Glencore says it will keep offices in Vancouver or Toronto.
The Keevils say the offer is “a sellout” and that Teck must remain in Canadian hands (keep in mind that Japan’s Sumitomo Metal Mining Corp and fund manager China Investment Corp. are already significant shareholders).
The shareholder vote is April 26th. What do you think?
Let us know by reply email if you think Teck shareholders should vote YES or NO to the Glencore offer. We’ll publish results next week.
Roadshow schedule: if you’d like more info on any of the companies we’re working with this week, or would like to attend meetings in any of these cities, please let us know.
Thank you so much for your continued support and interest.
Rick Peterson,
Chair