A roundup of some of the North American equities making moves in both directions today
On the rise
Resolute Forest Products Inc. (RFP-T) soared after saying late Thursday strong lumber markets are allowing it to pay a special dividend, spend US$50-million on its sawmills to support growth and repay US$180-million in debt.
The Montreal-based pulp, paper and lumber producer says the $1-per-share dividend will be paid July 7 for shareholders at the close of business on June 28.
The additional capital spending includes $22-million to modernize equipment at its sawmill in Senneterre, Que., $13-million to increase capacity at the sawmill in Thunder Bay-Fort William First Nation, and $15-million at a sawmill in Arkansas and another in Florida.
The U.S. investments are in addition to spending associated with the restart of its sawmill in El Dorado, Ark.
All projects are expected to be completed by the end of the third quarter of 2022.
The repayment of debt in the second quarter leaves the company with just $300-million owing in 2026 and liquidity of about $850-million.
“The cash generated with our lumber platform in these strong lumber markets provides the opportunity to share benefits directly with shareholders,” stated CEO Remi Lalonde.
Tourmaline Oil Corp. (TOU-T) gained after it said on Friday it would buy privately owned Black Swan Energy Ltd in about $1.1-billion deal, as the oil and gas producer looks to expand in the Montney oil and gas region, one of North America’s top shale plays.
The Montney oil and gas region in Canada has seen a wave of consolidation as small companies struggling to weather the impact of coronavirus sell their holdings in what just a few years ago was a booming patch.
The deal value consists of 26 million Tourmaline common shares and net debt of up to $350 million, including all transaction costs.
Tourmaline will acquire an expected average production capacity of over 50,000 barrels of oil equivalent per day (boepd) when the deal closes, which is expected in the second half of July.
Bombardier Inc. (BBD.B-T) was flat after announcing approval of a normal course issuer bid to satisfy future obligations under its employee share-based incentive plans.
The Montreal-based company plans to purchase up to 62 million Class B shares, or approximately 2.9 per cent of issued and outstanding shares as of June 2.
Roots Corp. (ROOT-T) jumped after it reported a narrower first-quarter net loss on Friday, as the company continues to cut costs and benefited from elevated e-commerce sales during the pandemic.
On Friday, the Toronto-based retailer reported that its total sales rose 24.7 per cent to $37.3-million in the 13 weeks ended May 1, compared to the same period last year.
Roots reported a net loss of $4.9-million or 12 cents per share, compared to $7.8-million or 18 cents per share in the first quarter last year.
As governments imposed renewed lockdown measures to curb a third wave of COVID-19, the company’s North American stores were closed for approximately 30 per cent of the quarter, compared to roughly half of the quarter in the same period last year. E-commerce sales grew by 50 per cent in the quarter, partially offsetting the loss of store sales during the closures.
Roots has now reopened its six stores in Quebec and Nova Scotia, and on Friday the company began reopening stores in Ontario. But because Canada’s largest province has not yet permitted stores in malls to open unless they have street-facing entrances, 36 of Roots’s 62 Ontario stores remain closed. The rest are now operating under Ontario’s current 15-per-cent capacity limit.
- Susan Krashinsky Robertson
On the decline
Intact Financial Corp. (IFC-T) was lower after saying its joint venture with Tryg A/S has signed a deal to sell Codan Forsikring A/S’s Danish business (Codan DK) to Alm. Brand A/S Group for about $2.52-billion.
Toronto-based Intact says it will receive 50 per cent of the proceeds and plans to use them to repay debt and for general corporate purposes.
Intact and Tryg completed their deal for RSA Insurance, one of the U.K.’s oldest insurance companies, last week.
Under the terms of the deal, Tryg acquired RSA’s Swedish and Norwegian businesses, while Intact added RSA’s operations in Canada, the U.K., Ireland and other international locations.
The companies co-own what was RSA’s Danish business.
The Codan DK sale is expected to close during the first half of 2022, subject to approvals from regulatory and antitrust authorities as well as other conditions.
The Toronto-based company also said it expects trading of its common shares on the Nasdaq on June 15, the expected closing date of the offering.
Tesla Inc. (TSLA-Q) dipped after unveiling a high-performance version of its Model S late Thursday, aiming to reignite interest in the nearly decade-old sedan and fend off rivals such as Porsche, Mercedes-Benz and Lucid Motors in the luxury electric vehicle market.
Tesla redefined electric cars in 2012 when it launched its high-end Model S with a sleek design and long driving range, and Chief Executive Elon Musk said the new version was designed for a future where cars drove themselves.
“This car crushes,” Mr. Musk said at an evening delivery event held at Tesla’s U.S. factory in Fremont, California.
“It’s like, man, this is, just, sustainable energy cars can be the fastest cars, be the safest cars, gonna be the most kick-ass cars in every way.”
Mr. Musk’s irreverent attitude and speeches peppered with engineering terms, have given him a star power he uses to draw attention to the brand, allowing Tesla to avoid advertising.
The model is “faster than any Porsche, safer than any Volvo,” said Mr. Musk, wearing a black leather jacket, after he drove the Model S Plaid down a test track onto the stage.
He said he expects to produce 1,000 a week next quarter.
Ahead of the event, Tesla raised the price by US$10,000 to US$129,990 against US$79,990 for a long-range Model S.
With files from staff and wires