<br />A vile of <strong>Visudyne</strong>, a product produced by QLT, in Vancouver November 19, 2004. QLT sold Visudyne, its flagship product, to Valeant Pharmaceuticals Inc. for $112.5-million.Jeff Vinnick/The Globe and Mail
A major acquisition in the health-care sector helped the Toronto stock market to a modest advance Monday.
The S&P/TSX composite index gained 29.15 points to 12,696.37 as Valeant Pharmaceuticals confirmed that it plans to expand its eye-care business by buying Bausch and Lomb for $8.7-billion (U.S.) in cash.
The Montreal-area company will finance the deal by issuing up to $2-billion of new equity, with the remainder paid for with debt.
Valeant stock was up $8.83 or 10.15 per cent to $95.85 after earlier hitting an all-time high of $96.25. That after its shares rose 13 per cent on Friday on speculation the deal was set to go through.
"What I found interesting is that usually, the buyer's stock price goes down," said Colin Cieszynski, market analyst at CMC Markets Canada.
"To actually see it go up is quite impressive, which usually means the Street thinks it's a good deal."
The Canadian dollar closed down 0.15 of a cent at 96.74 cents US amid mixed commodity prices and as traders looked to the Bank of Canada's latest announcement on interest rates.
The central bank makes its next announcement Wednesday, the last such word on rates from outgoing bank governor Mark Carney. Analysts expect the bank will leave its key rate unchanged.
Trading on the Toronto market was lighter than normal with U.S. markets closed for Memorial Day.
"It's totally typical that on days when the U.S. is closed, Canadian markets are pretty quiet and often trade a little bit higher, which is what we're seeing today," Cieszynski said.
Elsewhere on the TSX, the information technology sector was ahead, largely due to a 10 per cent gain in Wi-LAN stock. Its shares rose 39 cents to $4.65 after the technology innovation and licensing company said it had signed a licence agreement with U.S. computer company Dell Inc. to settle patent litigation.
"Dell has obtained a licence to a subset of wireless patents for certain wireless products and the litigation between the two companies will be dismissed," Wi-LAN said.
Terms of the agreement are confidential.
The gold sector also helped lift the TSX, up about 0.7 per cent as June bullion gained $6.70 to $1,393.30 an ounce late in the afternoon in electronic trading on the New York Mercantile Exchange.
Barrick Gold Corp. gained 37 cents to $20.06. The stock fell two per cent Friday after Chile announced it was imposing a $16-million fine and requiring the company to meet certain conditions before it can resume construction on the Pascua-Lama project, citing "serious violations" of its environmental permit.
The base metals sector rose almost one per cent as July copper edged up one cent to $3.30 a pound. HudBay Minerals was up 21 cents to C$8.34.
The telecom sector was ahead 0.7 per cent with shares in Manitoba Telecom Services, which announced last week plans to sell its Allstream business, ahead $2.07 or 6.1 per cent to $36. RBC Dominion Securities raised the stock to "outperform" from "sector perform." It also increased its price target to $37 from $33.
The energy sector dipped slightly as concerns about global energy demand sent the July crude contract down 50 cents to $93.65 a barrel in electronic trading on the New York Mercantile Exchange.
In other corporate news, engineering giant SNC-Lavalin Group Inc. is making a limited-time offer of "amnesty" to whistleblowers within its workforce. The amnesty won't cover executives in SNC's office of the president, its management committee groups or anyone who directly profited from a violation. SNC is undergoing investigations for alleged fraud and corrupt practices by some former employees. Its stock was 40 cents higher at $41.19.
The TSX could find gains elusive this week after hopes for a global economic recovery faded somewhat last week amid a survey on China's monthly manufacturing pace which showed a bigger-than-expected decline.
Less-than-clear indications from the U.S. Federal Reserve on whether it might scale back its aggressive bond-buying program, dubbed quantitative easing or QE, also caused investors to curb their enthusiasm.