Was this forwarded to you? Join hundreds of finance professionals reading The Morning Meeting by clicking the button below.

• Definity buys Travelers Canada for $3.3B

• Manufacturing slowdown pressures wholesale sales

• InterRent’s $2B buyout offer lifts residential REITs

• Trump says Canada is considering 51st state… again

• BNS misses EPS, but rises on some positive points

• Oil positioning nears most bearish in >10 years

Definity puts dry powder to work in $3.3B deal

After the close yesterday Definity (DFY) announced an accretive $3.3B acquisition of Travelers Canada. They paid 1.4x book value for the portfolio, well below where it currently trades and its long-term average.

On the surface, it’s a scale deal - unlocking $100M of synergies and adding $1.6B in gross written premiums…

… but it also brings diversification benefits, as Travelers’ Canadian book has a heavier skew towards commercial lines versus DFY’s current mix.

Lastly, it’s an efficiency deal - as ~$3B of excess capital and leverage capacity at the combined company let DFY get this over the finish line without too much dilution ($350M). On paper it looks awesome, let’s see how reality matches up.

Manufacturing lull drags down wholesale sales

Preliminary estimates for both manufacturing and wholesale sales came in weak, down 2.0% and 0.9%, respectively. The manufacturing estimate marks the third straight drop and the largest since October of 2023, driven by petroleum/automotive products.

The motor vehicle and parts slowdown follows a pre-tariff pull forward in March and was the primary driver of the wholesale contraction. With tariffs now in place, the category should weigh on results for May as well.

InterRent buyout lifts residential REITs

Yesterday morning InterRent (IIP-U) agreed to be taken private by exec chair-led CLV Group and Singaporean sovereign wealth fund GIC in a ~$2B deal that the market was speculating would happen.

The deal comes on the back of a few familiar sharks circling the waters, with Blackstone building a ~6% stake and Anson Funds building a 9% stake before launching an activist campaign around leverage reduction.

The residential REITs ran on the announcement, as investors reassessed fair value and cycled capital out of IIP. The performance wasn’t equal though, with Killam leading the group and Boardwalk underperforming, a trade we highlighted recently.

With a 40-day period where InterRent can consider other offers and shares closing above the $13.55 deal price, this one might not be done yet.

Well…

… he’s relentless. At this rate, we’re expecting Trump to issue an executive order on Mormon missions, redirecting all travel north of the border.

Flagging Cameco (CCO), as insiders dump stock into the rally fueled by Trump’s executive orders on nuclear, potentially signalling it was overdone (though most activity on the board is selling).

The big Pet Valu (PET) sale might raise some eyebrows too - but it’s related to the $150M secondary placement they announced two weeks ago.

• Private equity portfolios underperform at big Canadian investors

• Ontario judge approves $500M settlement in Loblaw bread-fixing case

• Primaris REIT to spend $50M to repurpose 5 Hudson’s Bay stores that saw no bids

Taiga Building (TBL) popped >20% on the announcement of a $1.67 per share special dividend for holders of record on June 6^th .

Celestica (CLS) looks to be taking a breather, after a 35% run in the last month.

YESTERDAY’S EARNINGS

Scotiabank (BNS) reported a small EPS miss, due to a conservative $300M Q/Q jump in provisions on performing loans. The stock was up ~1.5% on the day though, on its 20M share buyback program (1.6% of shares outstanding) and 4% dividend hike.

TODAY’S EARNINGS

YESTERDAY’S ECONOMIC RELEASES

TODAY’S ECONOMIC RELEASES

Investor positioning on oil futures is nearing its most bearish in over a decade, a bet Strathcona (SCR) is taking the other side of.