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Customers line up at a Second Cup outlet in Toronto in this file photo.

Inside the Market's roundup of some of the Canadian small caps making news and on the move today. This post will be updated through the morning.

Primary Energy Recycling Corp., which captures and recycles recoverable heat and byproduct fuels from industrial processes, is being bought by a consortium led by Fortistar LLC $5.40 (U.S.) or about $6.07 (Canadian) a share in cash. This represents a 29 per cent premium to its closing price Friday.

Shares in mid-afternoon TSX trading were up $1.13, or 24 per cent, at $5.83 (Canadian).

Acumen Capital Research analyst Brian D. Pow noted that there are several conditions necessary for the takeover to proceed, which may be why shares are trading below the full value of the offer. But he still suggests Primary shareholders tender.

"Items such as outages, interruptions, sustained failure, strikes, or any other extraordinary event or circumstances that materially effect Primary's production levels and financial performance have the potential to allow termination of the arrangement. Management suggested that some of the conditions are common clauses in these types of transactions and in agreeing to these conditions believed the risks are manageable," he noted.

"With unanimous board approval and 44.5 per cent of outstanding shares we believe the transaction will go ahead subject to any of the noted risks not occurring. The price is very reasonable at about 8.7 times 2015 EV/EBITDA, which is in line with the peer group pricing we used to derive our recent 12-month target price. ... Investors should believe that both parties intend to go through with the transaction," Mr. Pow said.

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The Second Cup Ltd. has announced the acquisition of 17 Second Cup cafes in prime Toronto area locations.

The cafes are currently owned by long-standing franchisees, Debbie and Bob Riche, who will be joining the Second Cup team as Director of Operations, Corporate cafes and General Manager, Corporate cafes, respectively. The acquisition of the cafes is expected to close on Nov. 6, 2014. "This transaction is expected to be accretive to earnings in 2015," says says Alix Box, president and CEO of The Second Cup.

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Sulliden Mining Capital Inc. agreed to buy a 15 per cent stake in Australian miner Aguia Resources Ltd. and a 1 per cent net smelter return royalty on the Rio Grande project held by Aguia for $2-million (Australian). Sulliden will receive a board seat at Aguia, and has the right to participate in any future equity offerings by Aguia to maintain its proportionate equity interest. Furthermore, Aguia has the option to buy back the royalty for $1-million at any time for up to three years after the closing of the transaction.

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Tethys Petroleum Ltd. said its board of directors has received a request from Pope Asset Management LLC, which has a 17 per cent stake, to call an extraordinary general meeting.

"The proposing shareholder is seeking to requisition an EGM to consider and vote on resolutions to remove the majority of directors of the company (being all of the directors except for Julian Hammond, Marcus Rhodes and James Rawls) and to appoint David Botting, David Roberts, John Bell and David Henderson as directors of the company," Tethys said in a statement.

"The unanimous view of the board is that the proposed director changes are not in the best interests of the company and could seriously jeopardise the development of the business."

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Gold producer Troy Resources Ltd. said it has signed a mineral agreement with Guyana for its Karouni gold project. The agreement details all fiscal, property, import-export procedures, taxation and other related conditions for the development and operation of Karouni.

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Blacksteel Energy Inc. said its proposed transaction to acquire Alcan Fluid Disposal Ltd., Peace Drilling and Research Ltd. and Integrated Resource Technologies Ltd.has been terminated.

"As a result of current conditions in the capital markets, the corporation was unable to obtain the minimum financing required," Blacksteel said in a statement. "The corporation continues to look for opportunities to create shareholder value."

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Calmena Energy Services Inc. announced that it has completed the sale of its Brazil operations, including all of its assets and its wholly owned subsidiary in Brazil, to a private Canadian company for $7.4-million.

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Wi-Lan Inc. announced it has entered into a second patent assignment agreement with Panasonic Corp. Panasonic will assign, to a wholly-owned subsidiary of Wi-Lan, all rights and title to certain patents related to vending machine systems. Terms of the deal were not disclosed.

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In analyst actions today involving Canadian small caps:

Industrial Alliance Securities upgraded Amaya Gaming Group to "buy" from "hold" and raised its price target to $31 (Canadian) from $26.

CIBC World Markets upgraded Canexus to "sector outperformer" from "sector performer" with a price target of $5.25 (Canadian).

Jennings Capital upgraded Timmins Gold to "buy" from "sell" with a price target of $1.75 (Canadian).

CIBC World Markets raised its price target on Intact Financial to $84 (Canadian) from $76 and maintained a "sector outperformer" rating.

Euro Pacific Canada upgraded Theratechnologies to "speculative buy" from "hold" and raised its price target to $1 (Canadian) from 55 cents.

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