“Brexit” happened … and despite the turbulence, both the S&P 500 and TSX are within spitting distance of their pre-Brexit highs. Somewhat surprisingly, the FTSE 100 closed Wednesday above the pre-Brexit high, and the FTSE Europe Index has recovered about half of the early Brexit losses.

This was an important event of historic proportions, and the United Kingdom’s decision to leave the European Union will undoubtedly be a drawn out and painful affair. But in my view, the markets are interpreting the implications correctly: Brexit may eventually have more bark than bite.

Both parties have enormous financial incentives to get it right, and we expect that it will eventually get done on reasonable and mutually agreeable terms. Just imagine the Germans, French, Dutch and Italians giving up on one of their top export markets, or the Britons walking away from a marketplace that takes more than half of their exports—that kind of split is just not going to happen.

We had hoped to deploy some of the cash in the Dividend Champions Portfolio during the ensuing market turmoil, but the stocks on our wish list did not reach our target prices. However, if we see another bout of market weakness, then we will be looking to buy more shares of Cineplex (TSX: CGX, OTC: CPXGF) and Fortis (TSX: FTS, OTC: FRTSF) for the portfolio.

However, we did manage to close out our long put option on Royal Bank of Canada on Friday for an overnight profit of 31%. We will look to reopen this position at a later date when markets have calmed down.

Please note that we are preparing a full write-up on the implications of Brexit for Canada and the companies held in the Dividend Champions Portfolio for the July issue of Canadian Edge.

In other news, TransCanada Corp. (TSX: TRP, NYSE: TRP) is requesting formal arbitration under NAFTA provisions against the Obama administration’s rejection of the Keystone XL pipeline, seeking $15 billion for costs and damages. The company argues that it had reason to believe it would win approval to build the pipeline and claimed the U.S. spent seven years delaying a final decision.

The arbitration may take a very long time to conclude. And even if TransCanada succeeds in extracting some compensation from the U.S. Government, any potential award will probably be considerably smaller than the claim. For reference, TransCanada wrote off C$2.9 billion at the end of last year related to project expenses.

On the merger-and-acquisition front, TransCanada has now met all major conditions regarding its all-cash US$13 billion acquisition of Columbia Pipeline Group and expects the transaction to close on July 1. TransCanada previously indicated that the transaction would be accretive to earnings per share in the first full year of operations, and that the deal would support the company’s 8% to 10% annual dividend growth target through 2020.

TransCanada’s stock has performed quite well over the past few months, and now exceeds our fair-value estimate of C$55, or US$42. We would not be buyers of the stock at the moment, but will continue to hold it in the portfolio.

InnVest REIT’s (TSX: INN-U; OTC: IVRVF) unitholders approved the C$7.25 per unit cash offer from Bluesky Hotels at a meeting on June 28. Subsequent to the unitholder vote, the Alberta Superior Court also approved the transaction. Further closing arrangements include a regulatory approval under the Investment Canada Act and the satisfaction or waiver of other customary closing conditions. InnVest expects that the transaction will be completed in the third quarter of 2016.

Though unitholders will continue to receive the monthly distribution of C$0.033 per unit through the transaction’s completion, we would advise the sale of units anytime the REIT trades above C$7 per unit. The possibility of a higher third-party offer seems unlikely, so it’s best to book gains now rather than risk the deal coming undone later, even if that risk is a small one.