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CCCA61_027-031.qxd:CCCA_V1No1_DriversSeat-FIN.qxd 2/8/08 11:49 AM Page 29 Feature “ I think you will see more strategic buyers, who understand the market, taking advantage of the challenges that are created by difficult credit and economic conditions. And there is money available to do that. Sanford Riley ” President and CEO, Richardson Financial Group, Winnipeg probably a cyclical correction rather than structural, Olasker says: ated by difficult credit and economic conditions. And there is “If the only bid,or the winning bid,is conditional,you then have money available to do that.” to deal with the complexity of the private equity buyer’s financ- In other words, businesses with their own cash, ready access to ing. So corporate counsel are going to have to better understand credit, or their own shares to issue, can pick up bargains in a and be more diligent — in evaluating — the financing arrange- thinned-out market. ments that the private equity player has backing it up.” One Canadian company that sees itself ready to grow despite Still, there are upsides and opportunities.“If you are a corporate the credit crunch is TransCanada Corporation. A $30-billion counsel for a firm that is looking to make strategic acquisitions,”says company diversified over the power, pipeline and gas storage Sanford Riley, president and CEO of Richardson Financial Group industries, as well as the nuclear side of the energy business in Limited inWinnipeg,“I think the opportunities will be better than Ontario,TransCanada grows not only through greenfield devel- they were before.The competition is going to have to price more opment, but also through mergers and acquisitions.The compa- along the lines of the strategic buyer, and a strategic buyer has syn- ny, which is listed on both the TSX and NYSE, completed ergy advantages a financial buyer doesn’t have.” $4 billion in acquisitions this year in the U.S. alone. How has the nervousness in the credit market affected the com- Take advantage of opportunities pany? “To us, it’s not necessarily a bad thing,” says Sean McMaster, Riley stresses that, when approaching a market as challenging as executive-vice-president, corporate and general counsel. “On the this one appears to be, well-run businesses will see more oppor- energy side, private equity had been driving up prices on M & A ROBERT TINKER tunities than problems.“But they need capital to do that,and this auctions,so we weren’t being that successful.But that was because we are disciplined in our strategy and wouldn’t pay ridiculous prices for is why I think you will see more strategic buyers, who under- assets.Now we may have more success in some of these auctions.” stand the market, taking advantage of the challenges that are cre- PRINTEMPS 2008 CCCA Canadian Corporate Counsel Association 29