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Valeant Pharmaceutical’s offices in Montreal. (Ryan Remiorz/The Canadian Press)
Valeant Pharmaceutical’s offices in Montreal. (Ryan Remiorz/The Canadian Press)

At the open: TSX rises amid M&A activity, corporate earnings Add to ...

The Toronto stock market was up Tuesday amid major dealmaking in the pharmaceutical sector and earnings reports from the rail, telecom and mining sectors.

The S&P/TSX composite index edged up 21.98 points to 14,515.66.

The Canadian dollar gained 0.07 of a cent to 90.86 cents (U.S.).

U.S. indexes were also positive with the Dow Jones industrials ahead 68.36 points to 16,517.61, the Nasdaq composite index was ahead 32.20 points to 4,153.75 and the S&P 500 index was up 7.74 points to 1,879.63.

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Canadian drug company Valeant Pharmaceutical International Inc. has teamed with Bill Ackman’s Pershing Square Capital Management in a cash and stock bid worth around $40-billion for Botox maker Allergan. Under the buyout offer Allergan shareholders would receive $48.30 in cash and 0.83 Valeant share for each share of Allergan. Valeant said it expected the cash portion of the deal to be at least $15-billion (U.S.). In a separate filing, Pershing Square said it owns a 9.7 per cent stake in Allergan worth $4.1-billion. Valeant shares gained $4.37 to $143.313.

Swiss pharmaceutical giant Novartis AG is buying GlaxoSmithKline plc’s cancer-drug business for $14.5-billion, plus up to $1.5-billion more if certain milestones are met, and to divest most of its vaccines business to GSK for $7.1-billion, plus royalties. Separately, Novartis said it will sell off its animal health division to U.S.-based Eli Lilly & Co. for about $5.4-billion. Novartis shares gained $1 to $86.46.

On the earnings front, Canadian Pacific Railway had $254-million (Canadian) of net income in the first quarter, up from $217-million a year earlier. Net income per share increased 16 per cent year-year, rising to $1.44 from $1.24 in the first quarter of 2013. The Calgary-based company’s revenue also increased, to $1.509-billion from $1.495-billion. Analysts on average had expected earnings of $1.41 per share on revenue of $1.51-billion and its shares climbed $9.20 to $173.19.

Teck Resources Ltd. posted an adjusted profit of $105-million or 18 cents a share, down from $328-million or $0.56 per share in 2013. That was below the 24 cents per share that analysts expected. Revenue also fell more than analysts had projected, dropping to $2.084-billion from $2.33-billion and below the $2.098-billion that had been forecast. Teck also plans to eliminate 600 positions, delay the restart of a B.C. coal mine and cut spending by five per cent. Teck shares declined 17 cents to $23.84.

In the U.S., McDonald’s said first quarter earnings per share came in at $1.21, missing analysts expectations by three cents and its shares stepped back 36 cents to $99.31 (U.S.).

And after the close Monday, Rogers Communications Inc. reported that quarterly net income dropped 13 per cent to $307-million (Canadian) or 57 cents per share. On an adjusted basis, the results missed analyst expectations, coming in at 66 cents per share, four cents below the average estimate. Wireless revenues, by far the biggest part of its business, dropped by two per cent to $1.73-billion and its shares shed $1.41 to $42.87.

Commodity prices were mixed and the energy sector fell 0.5 per cent while the May crude contract in New York down $1.42 to $102.95 (U.S.) a barrel.

The gold sector drifted 0.35 per cent lower while June bullion was 50 cents lower to $1,288 an ounce.

May copper was unchanged at $3.04 a pound and the mining sector lost 0.28 per cent.

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