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Ontario’s Highway 407: A $60 Billion+ Tunnel Or A Pricey Buyback?

Ontario Premier Doug Ford recently announced that the provincial government is considering buying back Highway 407, a tolled highway running across the Greater Toronto Area. This move follows mounting frustrations over high toll rates and traffic congestion across Toronto’s road network.

The proposal, however, comes at a time when the highway’s profitability has soared to new heights, raising questions about the financial implications of such a buy-back.

You can read more on the matter here.

What’s going on?

• US Investigates Major Telecom Hack Linked to Chinese Intelligence (theDeepDive)

• Bond Traders Buckle Up for ‘No Landing’ After Jobs Surprise (Bloomberg)

• Indigenous groups in U.S. and Canada clash over cross-border land claims (Globe)

• State Auditor Proposes Slashing 100,000 French Public Sector Jobs to Curb Deficit (theDeepDive)

• Activist Starboard Value has $1 billion Pfizer stake, taps former executives for help, sources say (CNBC)

• Spirit(ed) Away: Bankruptcy Speculation Shakes Spirit Airlines Stock (theDeepDive)

• 10-year Treasury yield hits 4% keeping equity bulls in check (Reuters)

• Google Considers Nuclear Power for AI Data Centers (theDeepDive)

• Hurricane Milton, Now a Category 4 Storm, on Track to Batter Florida (WSJ)

• Is The Condo Market On The Verge Of A Price Collapse? (theDeepDive)

• Migrants escape from Madrid airport for second time in a week (Reuters)

• Federal Court of Appeal dismisses challenge to construction of massive CN Rail hub in GTA (Globe)

• ILA Secures Wage Hike, Sets Sights on Blocking Port Automation (theDeepDive)

• China tells schoolteachers to hand in their passports (FT)

• US Conflict Minerals Law Not Reducing War in Congo, GAO Says (Bloomberg)

• Geico Doesn’t Want to Insure the Tesla Cybertruck (theDeepDive)

What’s the latest?

• Oil & Gas: Chevron has agreed to sell oilsands and shale assets in Canada to Canadian Natural Resources Ltd. for $6.5 billion in cash. The deal, effective as of Sept. 1 and expected to close in the fourth quarter, allows Chevron to raise funds and focus on core assets like the Permian Basin. For CNQ, the acquisition expands its dominance in the Athabasca Oil Sands Project and gives it a 70% stake in Alberta’s Duvernay shale.

• Northvolt: Northvolt AB is facing delays in its key battery manufacturing projects in Germany and Canada, which may extend project timelines by six to twelve months. This has raised concerns among governments that have heavily supported the company’s efforts with billions of dollars in grants and subsidies. The cost of the German gigafactory has increased by €1 billion, while the Canadian project faces delays in production timelines.

• Lithium: Rio Tinto Group has made an approach to acquire Arcadium Lithium Plc. While the financial terms of Rio's offer have not been disclosed, the bid comes at a time when lithium stocks are underperforming due to oversupply and weakened demand from EV manufacturers. Arcadium, formed from the merger of Allkem Ltd. and Livent Corp., has seen its market value drop to $3.3 billion from earlier highs, fueling speculation of it becoming a takeover target.

• 7-Eleven: The Caisse de Dépôt et Placement du Québec has indicated it would likely support Alimentation Couche-Tard Inc. in a potential takeover bid for Seven & i Holdings Co., according to senior executive Vincent Delisle. While CDPQ, a major Couche-Tard shareholder, is open to providing financial backing, the details of the possible deal remain unclear. Couche-Tard has previously approached Seven & i with a $39 billion bid, which was rejected.

• China Tariffs: Shell Plc reported continued strong performance from its natural gas and upstream businesses in the third quarter, with production ranging between 920,000 to 960,000 boe/d, despite a 29% decline in oil-refining margins and expected losses in its chemicals division. European gas prices rose 13% during the quarter, boosting the integrated gas business. However, weaker oil prices, with Brent crude down 17%, and reduced refining margins contributed to lower profitability.

Nuclear energy powers AI ambitions

The stock market and stuff

• Canadian Natural Resources Drops $6.5 Billion To Acquire Certain Chevron Assets In Alberta, Adds 122,500 BOE/d To Production Profile (theDeepDive)

• U.S. crude oil jumps 2%, trades near $76 as market waits for Israel strike against Iran (CNBC)

• Lithium Market Shakeup: Rio Tinto in Talks to Acquire Arcadium (theDeepDive)

• Obesity Drugmaker Rivus Said to Weigh IPO as Soon as This Year (Bloomberg)

• 23andMe’s Financial Freefall Sparks Fears Over Genetic Data Security (theDeepDive)

In the juniors

• Plurilock Secures US$1.7 Million Contract With Semiconductor Manufacturer (theDeepDive)

• Ivanhoe Cuts Copper, Zinc Guidance Following Q3 Production Results (theDeepDive)

• Robert Eckford: The Storied Leadership That’s Shaping RUA Gold (theDeepDive)

FULL DISCLOSURE: Sterling Metals is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Sterling Metals. The author has been compensated to cover Sterling Metals on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.