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Amazon is exploring offer for Peloton, source says; report says Nike also weighing bid

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Peloton Interactive Inc has drawn interest from potential buyers including e-commerce giant Amazon.com Inc, according to a person familiar with the matter, as the exercise bike maker struggles to maintain pandemic-fueled growth.

Shares of Peloton surged 30% in extended trading on the news, which comes days after activist investor Blackwells Capital urged the company’s board to put it up for sale.

Amazon is exploring an offer for Peloton and is speaking with advisers about whether and how to proceed, a source said. Peloton has not yet decided whether it will explore a sale, according to the source.

Meanwhile, the Financial Times reported https://www.ft.com/content/8ae3240b-8c09-48e4-bc2c-b7a9e4c00c51 late on Friday that sportswear company Nike Inc is also evaluating a bid for Peloton, citing people briefed on the matter, who said the considerations are preliminary and Nike has not held talks with Peloton.

Peloton and Nike did not immediately respond to a Reuters request for comment, while Amazon declined to comment.

Peloton’s sales boomed during COVID-19 lockdowns, with many snapping up home fitness equipment. But its fortunes began to fade as vaccinations increased, gyms reopened and rivals offered competitive products.

In November, it hinted that demand for its exercise bikes and treadmills was slowing faster than expected, and its market capitalization since then has shrunk to about $8 billion from a peak of nearly $52 billion in early 2021.

If the stock’s gains hold on Monday, Peloton could reach the $10 billion market-capitalization threshold.

Last week, Blackwells Capital called on the board of Peloton to remove CEO John Foley immediately, accusing him of deals that set high fixed costs and for holding on to excessive inventory, while misleading investors about the need to raise capital.

Blackwells criticized Foley for hiring his wife as a key executive and committing to a 300,000-square-foot, 20-year lease for office space in New York, among other things.

The investment firm, run by Jason Aintabi, has also urged the board to put the company up for sale to a buyer like Walt Disney Co, Apple Inc, Sony Group or Nike Inc, Reuters reported on Sunday.

Peloton has tried to cushion the blow to its growth by cutting the price of its popular bike and ramping up its ad spending, but growth remains stagnant.

Last month, Peloton said the company was reviewing the size of its workforce and “resetting” production levels, following a report that it was temporarily halting production of connected fitness bikes and treadmills after a significant drop in demand.

While many investors have become frustrated with Peloton due to a steep drop in its share price, analysts also note that the company may be a difficult acquisition target because of its two classes of stock, effectively allowing insiders to control it.

The news was first reported by the Wall Street Journal. (https://on.wsj.com/3AVMIf7)

The growth in the fitness band market has prompted tech giants such as Apple Inc and Samsung to introduce features for health tracking, including electrocardiogram and blood pressure sensor. Alphabet Inc-owned Google closed its acquisition of fitness tracking company Fitbit Inc in January.

Tech giants including Amazon and Alphabet have also seen a rise in their valuation after blockbuster results this week. A day after Facebook owner Meta Platforms suffered the deepest loss of stock market value in history for a U.S. company, Amazon logged the greatest ever one-day increase in value.

(Reporting by Rithika Krishna, Tiyashi Datta, Nivedita Balu and Shivam Patel in Bengaluru and Greg Roumeliotis in New York; Editing by Devika Syamnath, Peter Henderson, Anil D’Silva and Kim Coghill)

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Ford government caps rent increases to 2.5% in 2023 – CityNews Toronto

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  1. Ford government caps rent increases to 2.5% in 2023  CityNews Toronto
  2. Ontario is doubling how much landlords can hike rent prices by in 2023  blogTO
  3. Ontario rent guideline highest increase in a decade  CP24 Toronto’s Breaking News
  4. Rent increases in Ontario capped at 2.5 per cent next year  Tbnewswatch.com
  5. View Full coverage on Google News



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Air Canada to reduce flights this summer amid 'customer service shortfalls' – CTV News

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Air Canada is planning to reduce its flights in July and August, according to a statement from the company’s president, as the airline continues to deal with “customer service shortfalls.”

“Regrettably, things are not business as usual in our industry globally, and this is affecting our operations and our ability to serve you with our normal standards of care,” Michael Rousseau wrote.

The airline will be reducing its capacity as summer travel comes to a peak and pandemic-related restrictions on travel continue to lift.

In an emailed statement to CTV News Channel, an Air Canada spokesperson said the company will be reducing its schedule by an average of 154 flights per day for July and August. Prior to this change, Air Canada said it was operating around 1,000 flights per day. The routes most affected are flights to and from Toronto and Montreal airports. The changes will reduce the frequency of these flights, and will primarily affect evening and late-night flights on the airline’s smaller aircraft.

The spokesperson also said the airline will be temporarily suspending routes between Montreal and Pittsburgh, Baltimore and Kelowna, and Toronto and Fort McMurray. International flights will remain mostly unaffected, except for timing changes that the spokesperson said would reduce flying at peak times.

“To bring about the level of operational stability we need, with reluctance, we are now making meaningful reductions to our schedule in July and August in order to reduce passenger volumes and flows to a level we believe the air transport system can accommodate,” the statement reads.

While Rousseau acknowledges this will have a “negative impact on some customers,” he said he hopes giving this notice to the public of the airline’s reduced schedule will allow travellers to make other arrangements.

“We are convinced these changes will bring about the improvements we have targeted,” he said. “But to set expectations, it should also be understood the real benefits of this action will take time and be felt only gradually as the industry regains the reliability and robustness it had attained prior to the pandemic.”

Recent data shows that as we head into the summer travel season, more than half of all flights in and out of some of Canada’s major airports are being cancelled or delayed as the tourism and airline sectors continue to face staffing shortages. 

On Wednesday, the CEO of the Montreal-Trudeau Airport – where Air Canada said it would be reducing some of its flights – told CTV News Montreal that the airport was already in discussions with airlines to reduce the number of flights.

“We’re having discussions and it’s likely the frequencies — the number of flights we’ll have on a given destination — or destinations themselves,” Philippe Rainville said, adding that a staffing shortage at the airport is causing issues, most notably in loading and unloading luggage from planes.

Toronto Pearson International Airport is experiencing similar issues, with videos circulating on social media appearing to depict hundreds of pieces of luggage piled up in the baggage claim area.

“I have had conversations with the four largest airports and the two largest airlines just on Thursday and I will be having follow up conversations with them soon,” Transport Minister Omar Alghabra said at a press conference on Wednesday. “They know that they need to add more resources and they are working on that and we are offering our support to address these issues. But these are unacceptable issues.”

Airline and airport workers say some of the big reasons behind the struggle to address the industry’s staffing shortage are that they’re not being treated well, and their pay is not sufficient for how difficult the job is.

“There are so many screening officers that have quit because of low pay and poor working conditions that the airports are severely understaffed,” David Lipton, representative of the United Steelworkers union in Ottawa, told CTV National News on June 19.

Lipton said some unions are offering screening staff hundreds of dollars a week if they don’t take a vacation or sick days. 

With files from CTV News Montreal, CTV News Toronto, and Alexandra Mae Jones

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Accounting firm EY to pay $100M US fine after auditors caught cheating on ethics exams – CBC News

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Accounting firm Ernst & Young will pay $100 million US to settle U.S. Securities and Exchange Commission (SEC) charges that its auditors cheated on certified public accounting (CPA) exams and that it misled the agency’s investigators.

The London-based auditor admitted to the charges and agreed to pay what the SEC said is its largest fine against an auditor.

“EY acknowledges the findings determined by the SEC,” said Brendan Mullin, EY media relations director, adding that the firm’s response has been “thorough, extensive and effective.”

“At EY, nothing is more important than our integrity and our ethics.”

The CPA is the key qualification for accountants in the United States.

EY has also agreed to “undertake extensive remedial measures to fix the firm’s ethical issues,” the SEC said.

49 people got test answers ahead of time

The Wall Street watchdog found that 49 EY professionals “obtained or circulated” answer keys to CPA licence exams, while hundreds of others cheated to complete the continuing professional education components relating to CPA ethics.

“This action involves breaches of trust by gatekeepers … entrusted to audit many of our nation’s public companies. It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams,” said Gurbir Grewal, the SEC’s enforcement director, in a statement.

“And it’s equally shocking that Ernst & Young hindered our investigation of this misconduct,” added Grewal.

EY submitted to the SEC that it did not have issues with cheating when, in fact, the firm had been informed of potential cheating on a CPA ethics exam by a member of staff, the SEC said.

It added that EY admitted it did not correct its submission even after an internal EY investigation confirmed there had been cheating, and even after its senior lawyers discussed the matter with the firm’s senior management.

The SEC’s order also finds that EY violated a Public Company Accounting Oversight Board (PCAOB) rule requiring the firm to maintain integrity in the performance of a professional service.

The SEC has ordered EY to retain two independent consultants to help remediate its deficiencies. One will review the firm’s policies and procedures relating to ethics and integrity. The other will review EY’s conduct regarding its disclosure failures, including whether any EY employees contributed to the firm’s failure to correct its misleading submission, the SEC said.

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