A roundup of some of the North American equities making moves in both directions today
On the rise
Mortgage insurer Genworth MI Canada Inc. (MIC-T) soared after it said on Monday Brookfield Business Partners (BBU.UN-T) will buy the remaining 43-per-cent stake it does not hold in the insurer for about $1.6-billion.
Genworth said the real estate service provider, which owns about 57-per-cent stake, will offer about $43.50 for each share in Genworth, representing a premium of about 22 per cent to the stock’s last closing price.
Bombardier Inc. (BBD.B-T) increased after reaching a deal with U.S. aircraft parts maker Spirit AeroSystems (SPR-N) to to reduce the purchase price of its aerostructures unit to US$275-million from US$500-million.
Spirit had agreed to buy the aerostructures business in 2019 for US$1-billion in cash and debt.
The companies expect to close the deal on Oct. 30, Spirit said.
Dunkin' Donuts and Baskin Robbins chains owner Dunkin' Brands Group Inc. (DNKN-Q) soared after confirming late Sunday it has held preliminary discussions to be acquired by Inspire Brands, a private equity-backed restaurant company.
“There is no certainty that any agreement will be reached,” said Karen Raskopf, Chief Communications Officer of Dunkin' Brands.
Dunkin' declined to reveal further details.
The deal being discussed would take Dunkin' Brands private at a price of US$106.50 a share, said the New York Times which first reported the development.
Inspire Brands, the owner of Arby’s and Jimmy John’s, declined to comment when contacted by Reuters.
The announcement could be made public as soon as Monday, the New York Times said.
Inspire’s portfolio includes more than 11,000 Arby’s, Buffalo Wild Wings, SONIC Drive-In, Rusty Taco, and Jimmy John’s locations worldwide, according to the company’s website.
Inspire Brands was formed in 2018 by private equity firm Roark Capital as a holding company after Arby’s completed the acquisition of Buffalo Wild Wings.
On the decline
Shares of Cenovus Energy Inc. (CVE-T) fell on Monday in response to the announcement of its plan to acquire Husky Energy Inc. (HSE-T), creating Canada’s fourth-largest energy company as it copes with chronically low crude prices and investor pessimism about the industry’s fortunes.
Cenovus, known for its Alberta oil sands operations, said on Sunday it will issue shares and stock-purchase warrants to acquire Husky, adding sizable oil-refining capacity in Canada and the United States to reduce its exposure to volatile Canadian oil markets. The $3.8-billion deal offers a 21-per-cent premium to Husky’s recent share prices, and Cenovus will also take on more than $6-billion in Husky debt.
See also: More mergers in oil sector expected after Cenovus, Husky transaction
It is the latest in a spate of North American energy transactions following the drop in oil prices that accompanied the COVID-19 pandemic. Last week, ConocoPhillips announced a US$9.7-billion offer for Texas-based shale-oil producer Concho Resources.
Alex Pourbaix, Cenovus’s chief executive officer, said he and his counterpart at Husky, Rob Peabody, had discussed combining the companies at various times in recent years. Talks became serious in the summer, after the coronavirus took its toll on energy demand. Cenovus executives used the code name “Purple” and Husky adopted “Harmony” to keep a lid on the negotiations.
- David Milstead and Jeffrey Jones
Brookfield Asset Management Inc. (BAM.A-T) was lower after agreeing to sell Simply Self Storage to Blackstone Group Inc. (BX-N) for about US$1.2-billion.
Brookfield acquired Simply Self Storage for US$830-million in 2016 and the company has a portfolio of 8 million square feet of self-storage facilities.
Blackstone said Simply Self Storage is one of the top five private owners of self-storage in the United States, and the deal would make its real-estate investment trust, BREIT, the third biggest non-listed owner of such facilities.
“Self-storage is a resilient sector through economic cycles because of low tenant turnover, minimal maintenance costs and stable cash flows,” BREIT Chief Executive Officer Frank Cohen said.
The deal is expected to close before the end of 2020.
BREIT was launched in 2017 and has a net asset value of US$19-billion.
Hasbro Inc. (HAS-Q) slid after it beat analysts' estimates for quarterly revenue and profit on Monday, boosted by demand for its Monopoly and other board games from stuck-at-home parents looking to keep their children entertained.
As schools in many parts of the country continue to hold classes online, coupled with limited options for outdoor activities, parents have turned to toys and board games to keep their children occupied, boosting sales for Hasbro and rival Mattel Inc.
The company said total revenue from all of its gaming brands including Monopoly, Scrabble and Dungeons & Dragons jumped 21 per cent to about US$543-million in the third quarter.
The company’s net revenue rose 12.8 per cent to US$1.78-billion in the quarter ended Sept. 27, beating analysts' average estimate of US$1.75-billion, according to IBES data from Refinitiv.
Net earnings attributable to the company rose to US$220.9-million from US$212.9-million a year earlier. On an adjusted basis, Hasbro posted earnings of US$1.88 per share, beating estimates of US$1.63 per share.
With files from staff and wires
David Leeder