A roundup of some of the North American equities making moves in both directions today
On the rise
Under the deal, Goldman will purchase all issued and outstanding common shares for $15.22 per share in cash, representing a total equity value of approximately $1.13-billion.
The purchase price represents a 3 -per-cent premium to the 20-day volume-weighted average price per share for the period ending on Dec. 11 and a 36-per-cent premium to the closing price on Dec. 11.
The Ottawa-based cannabis company reported gross revenue of $41.3-million, the highest in its history and up 114 per cent year-over-year.
“We continue to hold the number one market share position in Quebec, while continuing to aggressively expand into other markets. HEXO is now top four in adult-use market share by net sales dollars in Canada. We have also moved into the top beverage spot through Truss, our joint venture with Molson Coors, and have reached the number one market share position for hash, which we believe will continue to be an important category for the industry,” said CEO and co-founder Sebastien St-Louis.
The deal, announced over the weekend, is also one of the biggest in an already bumper year for mergers and acquisitions and at current market prices will be almost two-thirds funded with AstraZeneca shares.
The terms of the deal give Alexion shareholders US$60 in cash and about US$115 worth of equity per share, working out at a premium of more than US$50 per share according to Reuters calculations.
Analysts from two brokerages, Cowen and Liberum, called the price respectively “considerable” and “hefty”, while praising the quality of the assets AstraZeneca was buying.
Video games maker Electronic Arts Inc. (EA-Q) was up in the wake of saying on Monday it had reached an agreement to buy Codemasters in a deal worth US$1.2-billion, trumping an earlier agreement between the British company and rival Take-Two Interactive Software (TTWO-Q).
UK-based Codemasters, known for its Formula One games for Playstation 4, said it considered the new offer to be superior to Take-Two’s cash-and-stock buyout offer of 485 pence per share.
Take-Two said it was considering its position.
California-based EA, as well as rivals Activision Blizzard Inc and Take-Two, have benefited from a surge in videogame sales in the United States fuelled by the trend of people spending more time indoors due to the COVID-19 pandemic.
On the decline
GFL Environmental Inc. (GFL-T) was lower after announcing before the bell a private offering of US$1.0-billion in senior secured notes due 2028.
According to the report, it may walk away from the deal if it can’t win approval at an upcoming shareholder meeting.
Pembina Pipeline Corp. (PPL-T) declined after announcing it is planning $785-million in capital spending next year as it moves to restart work on two key projects.
The company says it will resume construction of the next phase of its Peace Pipeline expansion and go ahead with the restart of its Empress co-generation facility.
The pipeline expansion includes a new pipeline and associated infrastructure in the LaGlace-Valleyview-Fox Creek corridor in Alberta.
Pembina says the initial capacity has been reduced to 160,000 barrels per day from 240,000, however the capital cost estimate has also been revised lower, by approximately $175-million, to $775-million.
In a research note, ATB Capital Markets analyst Nate Heywood said: “Overall, we view the announcement as positive given the solid financial expectations and disciplined resumption of growth spending. The update aligns will with our current investment thesis, given the disciplined spending approach will focus on projects with near-term completions and underpinning contracts.”
Transat A.T. Inc. (TRZ-T) dropped after the release of weaker-than-anticipated fourth-quarter results after the bell on Friday.
In a research note, Laurentian Bank Securities analyst Mona Nazir said: “Despite a partial reinstatement of flights July 23rd, passenger demand remains dismal which resulted in a quarterly EBITDA loss of $90-million vs. our estimate of a $38-million loss. Similar to airlines across the globe Transat is hemorrhaging cash. $250-million in short term financing was put in place, with the approval of AC, and TRZ management is looking to secure $500-million in financing to carry it through F2021. The reduced Air Canada offer of $5, from $18/share is a hard pill to swallow for long time shareholders, however looking at quarterly performance, short to medium term liquidity is of concern and the offer provides a shelter during the current storm and ultimately reduces going concern risk. The transaction is fully supported by TRZ management and the Board and shareholder Letko Brosseau (15-per-cent TRZ ownership) stated that the offer is “a very reasonable one”, although would wait to see if a rival bid emerges. A shareholders’ meeting to vote on the transaction is scheduled tomorrow, December 15th at 10AM. We believe the stock price has been trading above the offer price in hopes that a higher bid materializes (low $10-million break fee for competing offer).”
Aviva, under new boss Amanda Blanc, is looking to sell its businesses in continental Europe and Asia, to focus on Britain, Ireland and Canada, after years of share price underperformance in the life and general insurer irked investors.
Manulife meanwhile said in a separate statement it had also agreed to a 16-year bancassurance partnership with VietinBank, as part of the Aviva deal, giving the Canadian insurer a major boost in one of Asia’s rapidly growing markets.
Aviva and Manulife did not give financial details for the of Vietnamese transactions, but the British insurer said the deal would increase its net asset value and Solvency II surplus by around 100 million pounds ($133.67 million).
Spin Master Corp. (TOY-T) decreased after saying co-founders Ronnen Harary and Anton Rabie will step down from their co-chief executives role next year.
The company says Max Rangel has been appointed global president effective in January and will add the chief executive title in April.
He joins Spin Master from SC Johnson & Sons.
Mr. Harary and Mr. Rabie are expected to work with Mr. Rangel over the next several months and remain on the company’s board.
Spin Master says Mr. Harary will also continue to guide the growth of the company’s digital games creative centre and Mr. Rabie will continue to provide input on the company’s culture globally.
Scotia Capital analyst Orest Wowkodaw said: “While negative to near-term estimates, the closure could drive a brighter fundamental picture, with higher prices and more incentive for utilities to re-contract. Overall, we view the update as mixed for the shares.
“CCO shares are rated Sector Outperform based on slowly improving uranium market fundamentals and the company’s well-positioned balance sheet.”
Alphabet Inc. (GOOGL-Q) was down after several Google services, including YouTube, Gmail and Google Drive, suffering a global outage that affected thousands on Monday morning.
Google’s website that logs outages said the services that were affected for nearly an hour should be restored for most users.
The company has some of the most widely used services in the world. YouTube records over 2 billion logged-in users each month, with people watching over a billion hours of video on its platform.
“We’re back up and running!,” the video platform said in a tweet. It had earlier tweeted that many users were having issues accessing YouTube.
According to outage monitoring website DownDetector, more than 12,000 YouTube users were affected in various parts of the world, including the United States, Britain and India.
Ecommerce company Alibaba Group Holding Ltd (BABA-N) lost ground after China warned its internet majors of more anti-trust scrutiny and slapped fines and announced probes into deals involving Alibaba and Tencent Holdings Ltd.
In a statement, China’s State Administration for Market Regulation said Monday that it fined Alibaba 500,000 yuan (US$76,500) for increasing its stake in department store company Intime Retail Group to 73.79 per cent in 2017 without seeking approval.
China Literature, an online publisher and e-book company spun off by Tencent, was fined the same amount for also not seeking approval for its acquisition of New Classics Media. Separately, Shenzhen Hive Box, backed by Chinese courier firm SF Express, was censured over its acquisition of China Post Smart Logistics.
China’s market regulator is also reviewing the merger of two major Chinese game streaming platforms, DouYu International Holdings and Huya Inc. Tencent, the world’s largest gaming company that owns stakes in both firms, is leading the deal and would have controlled 67.5 per cent of voting shares in the merged business.
U.S. oil refiner Phillips 66 (PSX-N) slid after it set its 2021 capital budget at US$1.7-billion, around 43 per cent lower than forecast for the previous year, as the energy industry struggles to recover from the blow of the COVID-19 pandemic.
The coronavirus crisis dented demand for crude oil and created a supply glut, although prices have recovered from historic lows hit earlier this year as vaccines have started rolling out across the world.
Phillips 66′s 2021 refining capital budget of US$776-million includes pre-construction costs related to the company’s plans to reconfigure its San Francisco Refinery in Rodeo, California, to produce renewable fuels.
Including contributions from affiliates, the company’s adjusted 2021 capital program will be about US$2.38-billion, below 2020′s forecast of US$2.9-billion.
With files from staff and wires