On the idea of Jimmy Gardner of the Montreal Wanderers, Ambrose O'Brien set up the 'Les Canadiens' club as a francophone team created to attract fans away from the Montreal Le National of the rival Canadian Hockey Association and provide a local rivalry for the Wanderers.
A possible reason is that a Montreal franchise could be worth more in a potential future sale, while Haileybury was exiting the NHA anyway.
Another version of the events, as stated in Holzman's book is that Kennedy received the franchise for free, but had to pay $7,500 for Newsy Lalonde.
[1] In Young's biography of Ambrose O'Brien, it is stated that the Canadiens name and players were transferred to Kennedy.
In 1912, O'Brien left the hockey business completely, with the sale of the Renfrew Creamery Kings.