Cherniawsky, QC,
Donald N.
Felesky Flynn LLP
(780) 643-3060
dcherniawsky@felesky.com
Mr. Cherniawsky practises
in the Edmonton offi ce,
focusing on litigation for
matters involving income
tax and the GST, as well as
on international tax matters,
and corporate and personal
tax planning. He has written
extensively on these matters.
Ciardullo, John J.
Stikeman Elliott LLP
(416) 869-5235
jciardullo@stikeman.com
Partner and head of Toronto
offi ce Capital Markets/
Public M&A Group.
Practice focuses on M&A,
proxy contests, contested
meetings and corporate
fi nance transactions.
Colpron, Jean-Pierre
Norton Rose Fulbright
Canada LLP
(514) 847-4880
jean-pierre.colpron@
nortonrosefulbright.com
Mr. Colpron focuses on
private M&A; complex
domestic and cross-border
corporate and tax structures;
creation of private-equity
funds; commercial agree-
ments; domestic and
foreign joint ventures;
and equity investments in
infrastructure projects.
Chernin, Lawrence S.
Goodmans LLP
(416) 597-5903
lchernin@goodmans.ca
Mr. Chernin has over 25
years' experience in Can-
adian and international
M&A, public company and
private-equity transactions.
He has acted both for
issuers and underwriters
in connection with public
off erings including debt
and cross-border off erings.
Cockburn, Matthew
Torys LLP
(416) 865-7662
mcockburn@torys.com
Mr. Cockburn's corpor-
ate and securities practice
focuses on public and private
M&A, private equity and
corporate fi nance. His clients
include Canadian and US PE
fi rms, pension funds, public
issuers and underwriters.
Craig, John H.
Cassels Brock
& Blackwell LLP
(416) 869-5756
jcraig@casselsbrock.com
Mr. Craig's securities practice
focuses on equity fi nancings
for underwriters and issu-
ers, with an emphasis on
resource companies, M&A,
take-over and issuer bids,
going-private transactions,
and international mining
and oil & gas agreements.
advantage of low valuations and large pools
of money available to them."
Jeff Barnes, a partner in the Toronto of-
fi ce of Borden Ladner Gervais
LLP, says,
"there seems to be a lot of cash available,
looking for equity-type returns and going
into various types of funds and avoiding
low debt returns, especially at the retail
and pension fund levels. Borrowing costs
for good credits are still pretty low, even if
credit requirements may be going up."
According to Barnes, developments in
M&A will depend on the assessment by
buyers and sellers of the possibility of com-
peting bids, which he thinks will be lower
than normal, except for crown jewels. ! ere
may also be regulatory issues under compe-
tition or foreign investment laws because
there may be market pressure to sell signifi -
cant assets. "An increase in activity would
create a desire for higher break fees if buyers
become more active. Sellers now should, if
there is a potential regulatory issue, be look-
ing for better reverse break fees, because the
sale is likely the last opportunity in the same
time frame."
As a further thought in regard to timing,
"especially from now to the federal elec-
tion, I could see resistance to foreign ac-
quisitions, especially but not exclusively for
sovereign-owned entities, of important
assets like oil sands and technology-based
companies," he adds.
"One cannot predict how politically sen-
sitive or politically charged any given
M&A
situation may or may not be," says Press-
man. "Canada does not have a lot of global
dominant players and as a consequence,
our politicians can be protective of national
treasures, strategic assets as they have been
referred to in the past, so no one can say it's
a rubber stamp or predictable, this really
isn't the case."
ALTHOUGH THERE'S A lot of
money available for M&A, equity funds
and strategic buyers are being very disci-
plined as to the deployment of that capital,
says Eade. "We think there's a lot of money
available to invest in North America in the
energ y sector, but that it may take a little
while to see a lot of this kind of activity
happen, even compared to last year. We're
seeing companies, even those with secure
cost of capital and leverage profi les, wait-
ing for the bid/ask to narrow for the ac-
quisition of assets of potentially distressed
companies or a full buyout of the compa-
nies themselves."
What's driving this "is there's some
thought in that world that the bottom in
terms of pricing of commodities might not
be here yet, but I can speak from my own
experience that we're seeing them out there
kicking the tires in terms of entering into
negotiations with oil and gas companies."
In looking at challenging M&A trends,
Leopold says, "it is a very diffi cult market to
be a buyer given the pricing on deals, which
has become quite expensive, some would
say frothy, especially for the high-quality
deals. ! e converse of this trend is it is a
great time to be a seller and we are seeing
that reality refl ected in a number of our cli-
ents who are actively pursuing a sales pro-
cess for their business.
"In a very competitive deal environment
that is seller friendly, sellers have become
more and more demanding on deal terms.
For example, we see some deals where sell-
ers will only provide limited recourse, or in
some cases, no indemnifi cation for breaches
of the agreement, terms we haven't seen
since 2007." Leopold says to bridge the gap
between what buyers and sellers are pre-
pared to accept, "we are seeing representa-
tion and warranty insurance, which has
been prevalent in the US for some time, as
a vehicle that is slowly creeping into the Ca-
nadian market.
"I can tell you in my entire 30-plus-year
career, while I've looked at representation
and warranty insurance for clients on many
occasions; I actually had never done a rep/
warranty deal up until six months ago. I've
now done eight deals with rep and warranty
insurance for buyers in the last six months,
which illustrates how important this phe-
nomenon has become in Canada."
FOREIGN INVESTMENT
|
11
