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Acquisition-hungry drug maker Valeant Pharmaceuticals has Allergan in its sights. (Ryan Remiorz/THE CANADIAN PRESS)
Acquisition-hungry drug maker Valeant Pharmaceuticals has Allergan in its sights. (Ryan Remiorz/THE CANADIAN PRESS)

At midday: Valeant leads TSX to one-week low Add to ...

The Toronto stock market was sharply lower Wednesday amid pressure from the mining sector and mixed earnings reports from two of the big Canadian banks.

The S&P/TSX composite index dropped 88.12 points to 14,569.90, the lowest point in a week.

Bank of Montreal reported higher second-quarter net income of $1.1-billion, up 12 per cent from a year ago. Earnings per share in the quarter were $1.60, up from $1.40 year-over-year. Adjusted earnings per share were $1.63, up 13 per cent from the same quarter last year and 10 cents ahead of estimates. The bank is raising its dividend by two cents to 78 cents per common share. Its shares rose 48 cents to $77.28. BMO’s shares were already up three per cent from a week ago when the big banks started to post quarterly results.

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Investors weren’t quite so pleased with National Bank. It posted second-quarter net income of $362-million which was down 13 per cent from a year ago. Adjusted earnings were $1.05 a share, which was a penny higher than analyst estimates and it raised its dividend four per cent. However, revenue of $1.28-billion missed expectations of $1.34-billion and its shares fell 94 cents to $46.09.

The Canadian dollar was up 0.06 of a cent at 92.13 cents (U.S.).

U.S. indexes were lower amid a quiet day for economic news as the Dow Jones industrials shed 46.79 points to 16,628.71, the Nasdaq dipped 15.33 points to 4,221.74 while the S&P 500 index was down 3.36 points to 1,908.55.

Meanwhile, Valeant Pharmaceuticals shares gave back $4.67 to $136.37 as the company upped the cash portion its hostile takeover offer for Botox maker Allergan by $10 to $58.30 (U.S.) a share. The stock portion of the offer remains the same at 0.83 of a Valeant share, valuing the proposal at $162.86 per share or almost $50-billion total.

Valeant made its initial bid along with activist investor Bill Ackman. The investor’s Pershing Square Capital Management LP holds a 9.7 per cent stake in Allergan.

Meanwhile, Nestle says it is paying $1.4-billion in cash to Valeant for the rights to sell lip and wrinkle treatment Restylane and other skin products in the U.S. and Canada. The other products are Perlane, Emervel, Dysport and Sculptra, used to reduce wrinkles or address other issues in different areas of the face. Nestle already had the rights to the products outside the U.S. and Canada.

The gold sector led decliners for a second day, down 1.35 per cent while June gold was off $2.80 at $1,262.70 (U.S.) an ounce after closing Tuesday at its lowest level since early February.

July copper was unchanged at $3.18 a pound and the base metals component lost 1.27 per cent.

The energy sector was off 0.76 per cent while July crude in New York slipped 51 cents to $103.60 a barrel.

In other corporate developments, the Competition Bureau will approve a deal for Transcontinental Inc. to acquire 74 community newspapers from Quebecor Media if nearly half of those newspapers are put up for sale first. The regulator said that putting the newspapers for sale will allow a third party to buy and operate the publications independent “to the benefit of both readers and advertisers.” Last December, Transcontinental agreed to buy the 74 publications and related websites from Quebecor Media for $75-million. Transcontinental shares were unchanged at $15.01.

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