A roundup of some of the North American equities making moves in both directions today
On the rise
Cameco Corp. (CCO-T) was up 2.2 per cent after saying the Federal Court of Appeal has upheld a 2018 decision of the Tax Court of Canada that was in the company’s favour.
The 2018 decision, which centred around its use of a subsidiary in Switzerland to sell and trade its uranium, was appealed by the Canada Revenue Agency.
The agency contended it was a sham established to avoid Canadian taxes, while Cameco maintained it was for legal and sound business practices.
Raymond James analyst Brian Macarthur said: “We believe this decision is positive for Cameco given it addresses an uncertainty on the shares in Cameco’s favour. In addition the Government of Canada continues to hold $303-million in cash and $482-million in letters of credit that Cameco has been required to pay as installments on the reassessments issued by CRA for all tax years in dispute (2003 through 2013), tying up part of the Cameco’s financial capacity. When this tax dispute is finally resolved we believe Cameco’s financial flexibility would improve significantly as these funds become available to the company,and in the interim given both court decisions in its favour, Cameco will be asking the government to return these installments even if leave to appeal is requested by the CRA.”
Gilead Sciences Inc. (GILD-Q) finished flat after announcing it has priced its COVID-19 drug candidate remdesivir at US$2,340 for a five-day treatment in the United States and some other developed countries, as it set the price for a single vial at US$390.
The price for U.S. private insurance companies will be US$520 per vial, the drugmaker said, which equates to US$3,120 per patient for a treatment course using 6 vials of remdesivir.
This is below the US$5,080 per course recommendation by U.S. drug pricing research group, the Institute for Clinical and Economic Review, last week.
Gilead has entered into an agreement with the U.S. Department of Health and Human Services (HHS), with the agency and states set to manage allocation to hospitals until the end of September.
HHS has secured more than 500,000 treatment courses of the drug for American hospitals through September, the agency said on Monday.
This represents 100 per cent of Gilead’s projected production for July of 94,200 treatment courses, 90 per cent of production in August and September, in addition to an allocation for clinical trials, HHS said.
Boeing Co. (BA-N) rose 14.4 per cent on the first day of certification flight testing for its 737 Max with U.S. Federal Aviation Administration test pilots, a crucial moment in its worst-ever crisis.
Reuters first reported the long-awaited certification test flights were set to start on Monday and expected to last three days. The FAA said the flights will evaluate Boeing’s proposed changes to the plane’s automated flight control system.”
The FAA said it has not made a decision on return to service and still and has a number of additional steps before the plane will be allowed to return to commercial service.
Coty Inc. (COTY-N) will buy a 20-per-cent stake in reality TV star Kim Kardashian West’s makeup brand KKW for US$200-million, the cosmetics maker said on Monday, sending its shares up 13.3 per cent.
The deal values Ms. West’s cosmetics line at US$1-billion, slightly lower than the US$1.2-billion valuation Coty put on West’s half-sister Kylie Jenner’s business when it bought a majority stake in her namesake cosmetics line in January.
Ms. West, who is known for chronicling her life with her sisters on TV’s Keeping Up with the Kardashians, launched her makeup line in 2017, two years after Jenner’s successful foray into the beauty industry.
Coty, which has billions of dollars in debt and is grappling with slowing sales, last month offloaded majority stake in its hair and nail care business to U.S. buyout firm KKR & Co Inc. (KKR-N) for US$3-billion amid temporary salon closures across the globe.
Earlier this month, the company brought back its former Chief Executive Officer Peter Harf to turn around its business.
Facebook Inc. (FB-Q) rose 2.2 per cent despite PepsiCo Inc. joining a growing number of companies pulling ad dollars from the social media platform.
Lululemon Athletica Inc., Mountain Equipment Co-op and Arc’teryx are also joining a growing list of top international brands vowing not to advertise on Facebook because of hateful content that continues to spread on the social media platform.
Responding to demands for more action, Facebook on Sunday acknowledged it has more work to do and is teaming up with civil rights groups and experts to develop more tools to fight hate speech. Facebook said its investments in artificial intelligence have allowed it to find 90 per cent of hate speech before users report it.
Expanding the campaign outside the United States will take a bigger slice off of Facebook’s advertising revenue but is not likely have major financial impact. Unilever, for instance, on Friday committed to pausing its U.S. spending on Facebook for the rest of the year. That only accounts for about 10 per cent of its overall estimated US$250-million it spends on Facebook advertising annually, according to Richard Greenfield of LightShed Partners, a media and tech research firm.
TFI International Inc. (TFII-T) gained 0.1 per cent on the premarket announcement of the acquisition of “substantially” all the assets of MCT Transportation LLC.
MCT Transportation was a refrigerated and dry van subsidiary of Comcar Industries, Inc., which along with its other subsidiaries filed Chapter 11 petitions in the U.S. Bankruptcy Court on May 17.
Montreal-based TFI paid total consideration of US$9.6-million for the assets acquired including accounts receivable, along with US$2.8-million for two real estate properties.
On the decline
Great-West Lifeco Inc. (GWO-T) was narrowly lower after a subsidiary signed a deal to buy U.S. investment manager Personal Capital in a deal worth at least US$825-million.
Under the agreement, Empower Retirement will pay US$825-million, plus up to an additional US$175-million subject to the achievement of target growth objectives.
Great-West says Personal Capital is a hybrid wealth manager that combines a digital experience with personalized advice delivered by people.
The company says the deal will combine Empower retirement plan services and financial tools with Personal Capital’s digitally oriented personal wealth management platform.
IGM Financial Inc., a sister company to Great-West, holds a stake in Personal Capital and says it expects US$176.6-million in proceeds from the deal, plus up to an additional $24.6-million in possible additional payments.
The transaction is expected to close in the second half of 2020, subject to required regulatory approvals.
Aurora Cannabis Inc. (ACB-T) was down 0.4 per cent after saying co-founder Terry Booth has retired from the company’s board of directors.
Mr. Booth stepped down as chief executive in February, but had remained a member of the board of the cannabis company.
Michael Singer, Aurora’s executive chairman and interim CEO, says Mr. Booth helped set the table for the company to lead in Canada and around the world.
The move comes as Steve Dobler, another co-founder of the company, prepares to retire as president and a director of the company at the end of the month.
See also: Aurora Cannabis to close facilities, lay off 700 workers in restructuring
Chesapeake Energy Corp. (CHK-N) sat flat in the wake of filing for Chapter 11 on Sunday, becoming the largest U.S. oil and gas producer to seek bankruptcy protection in recent years as it bowed to heavy debts and the impact of the coronavirus outbreak on energy markets.
The filing marks an end of an era for the Oklahoma City-based shale pioneer, and comes after months of negotiations with creditors to lay the groundwork for the restructuring. Reuters first reported in March the company had retained debt advisers.
Over more than two decades, late wildcatter Aubrey McClendon built Chesapeake into one of the world’s biggest natural gas producers before resigning in 2013, after a corporate governance crisis and investor concerns over his heavy spending.
At that time, current CEO Doug Lawler inherited a company saddled with about US$13-billion in debt. Lawler managed to chip at the debt pile with spending cuts and asset sales, but this year’s historic oil price rout left Chesapeake without the ability to refinance that debt.
“Despite having removed over $20 billion of leverage and financial commitments, we believe this restructuring is necessary for the long-term success and value creation of the business,” Mr. Lawler said in a statement announcing the filing.
With files from staff and wires
David Leeder