12 LEXPERT
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2017
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WWW.LEXPERT.CA
Cherney, Richard D. Davies Ward Phillips
& Vineberg LLP(514) 841-6457 rcherney@dwpv.com
Mr. Cherney is a senior partner in the M&A , Capital Markets and Private
Equity practices. From 2000 to 2015 he was a managing partner of Davies.
He has advised and continues to represent many of Canada's largest
private and public companies and investors, including some
of Canada's most important financial institutions, in connection
with their important transactions.
Chapman, Robert D. Fasken Martineau DuMoulin LLP
(613) 696-6890 rchapman@fasken.com
Mr. Chapman's practice focuses on corporate finance and securities, mergers
and acquisitions, financial services and technology law. His experience
includes initial public offerings in Canada and the US, private placements
and mergers and acquisitions for technology companies. He is recognized
by top legal publications as a leading lawyer in the areas of corporate
and technology law.
Chamberland, Jean-Pierre Fasken Martineau
DuMoulin LLP (514) 397-5186 jchamberland@fasken.com
Mr. Chamberland is a partner and member of the Commercial/Corporate
group. He practises business law and works to help his clients achieve their
business and strategic objectives. He specializes in capital markets, mergers
& acquisitions, corporate governance and structured products. He has
advised clients ranging from entrepreneurs to executives and in a wide
range of business sectors
Chadwick, Robert J. Goodmans LLP
(416) 597-4285 rchadwick@goodmans.ca
Mr. Chadwick focuses on corporate, banking, private equity, insolvency
and reorganizations, and mergers and acquisitions law on national, cross-
border and international transactions. He counsels a diverse group of clients,
including boards, in various industries.
Castiel, Peter Stikeman Elliott LLP
(514) 397-3272 pcastiel@stikeman.com
Mr. Castiel is a partner in the Corporate Group and is a member
of the firm's Partnership Board. Practice focuses on cross-border M&A
and corporate financings. He has extensive expertise in advising private-
equity funds, sovereign wealth funds and leading public and private
companies in connection with acquisitions, divestitures and investments.
Carfagnini, Jay A. Goodmans LLP
(416) 597-4107 jcarfagnini@goodmans.ca
Mr. Carfagnini is head of the firm's Corporate Restructuring Group.
His practice includes a focus on corporate reorganizations, with an expertise
in cross-border and international transactions involving the US and the UK.
He has been an advisor in most recent major Canadian restructurings.
LEXPERT RANKED LAWYERS
have been for over 30 years," Phillips says. "You
can do bought deals in the United States — it's
just not 'the way things are done' down there."
is, he says, has had the effect of largely keeping
US underwriters out of the Canadian market.
Foreign banks sometimes participate in a bought
deal, but invariably with a Canadian bank as lead
underwriter.
Pincus says the bought deal is an enormous
advantage for a Canadian company planning an
acquisition. "It allows the buyer to have a cheque
in hand," he says. "It absolutely makes Canadian
companies more competitive from an available-
capital point of view," Pincus says. "It's the special
sauce of the Canadian market. It's oen called the
'Canadian advantage.'"
e other great virtue of the bought deal,
Pincus says, is that it locks in a guaranteed return
for the issuer because underwriters buy the entire
issuance from the client company at an agreed
price before taking it to market. Unlike a conven-
tional marketed deal, the issuer doesn't have to
worry that short-sellers will drive down the mar-
ket price. at risk is passed to the underwriter.
e agreed price for a bought deal usually en-
tails a discount of between one and four per cent
off the current market price of company stock,
which insulates the underwriting banks from the
risk of taking the new issuance to market. at
discount is then passed on to the market as a pur-
chase incentive, while underwriters receive a hey
three- to seven-per-cent fee for selling the issuance
into the market.
"Underwriters have lost money, but that's very
rare," Pincus says. ey regularly sell out the issu-
ance to institutional investors and retail broker-
ages within hours or days of announcing the of-
fering. On a hypothetical $1-billion bought deal,
with a typical four-per-cent fee, underwriters
stand to earn some $40 million in two to three
weeks, assuming they sell out the issuance at full
price. Phillips notes that TransCanada Corp.
paid a $143-million fee (3.25 per cent) to under-
writers last year in a Canadian-record $4.4-billion
