A roundup of some of the North American equities making moves in both directions today
On the rise
Great Canadian Gaming Corp. (GC-T) soared on Monday after saying Apollo Global Management Inc. (APO-N) has raised its takeover offer for the casino operator, winning key shareholder support.
The company says Apollo will now pay $45 per share, up from its earlier offer of $39 per share.
Great Canadian shares closed at $37.24 on the Toronto Stock Exchange on Friday.
Great Canadian had faced vocal opposition from some shareholders including one of its largest, Bloombergsen. However, Bloombergsen, CI Global Asset Management and Burgundy Asset Management Ltd., as well as others have agreed to support the new offer.
Great Canadian says shareholders holding about 50 per cent of its outstanding shares have entered into voting support agreements and committed to vote in favour of the deal at the new price.
Endeavour Mining Corp. (EDV-T) was higher after announcing it has increased its stake in the Fetekro Project in Côte d’Ivoire, ahead of the expected publication of a Pre-Feasibility Study in the first quarter of 2021.
Under the new deal, Endeavour will raise its stake in the project to 80 per cent from 65 per cent. Both SODEMI, a state-owned mining company, and the Government of Côte d’Ivoire will have a 10-per-cent stake.
Endeavour acquired the additional stake from SODEMI for $19-million plus contingent payments of $3 per ounce for future Proven and Probable reserves defined outside of the existing Measured and Indicated resource boundary.
Dye & Durham Ltd. (DND-T) was up after it raised its revenue guidance for the current quarter to more than $30-million from a previous range of $27-million to $29-million.
“The expected improvement is primarily due to the Company’s integration plans and realization of synergies being ahead of schedule for the recent acquisitions of Property Information Exchange (pie) and Stanley Davis Group acquisition,” it said.
First Quantum Minerals Ltd. (FM-T) was up in the wake of elevating director of strategy Tristan Pascall to chief operating officer and said long-time president Clive Newall will step back from an executive role but remain as a director.
First Quantum, which operates the Sentinel and Kansanshi mines in Zambia, said Mr. Pascall would assume the COO position effective Jan. 1, 2021.
Mr. Pascall was general manager of the company’s Cobre Panama mine through January 2020.
Mr. Newall, who has been president and a director of the company since its inception, will work in a non-executive capacity through the transition, the company said.
Copper and other industrial metals prices fell on Monday as a more infectious strain of the coronavirus threatened to wreak further damage on the global economy and investors ditched riskier assets.
Nike Inc. (NKE-N) rose in the wake of saying after the bell on Friday that full-year revenue will likely be better than previously expected, after COVID-wary shoppers demanding outdoor sportswear drove its third consecutive surge in online sales.
The global health crisis has pushed people to take up activities such as running or biking, giving a much needed boost to Nike and other sportswear makers after they took a hit to sales earlier in the year.
Under lockdown, people have also been logging into Nike’s workout and store apps en masse, driving significantly higher online sales all year.
The time Nike has invested in its e-commerce channels has paid off and given it a big competitive edge over rivals like Adidas, said Jessica Ramirez, retail analyst at Jane Hali & Associates.
“Nike’s website is promptly updated and easy to browse, its app is intuitive and its focus on gathering customer data through its various services has really helped it target the right consumers at a time when people are more cautious with their spending.”
The world’s biggest athletic apparel company said it expects annual revenue growth in the “low-teens,” up from its previous forecast of a high single-digit to low double-digit increase.
See also: Monday’s analyst upgrades and downgrades
On the decline
Tesla Inc. (TSLA-Q) fell in the wake of making its much anticipated debut into the benchmark S&P 500 index , after rising to a record high on Friday in a frantic day of trading.
The company, headed by billionaire Elon Musk, became he most valuable ever admitted to Wall Street’s main benchmark and accounts for 1.69 per cent of the index, according to S&P Dow Jones Indices’ analyst Howard Silverblatt.
The shares have surged some 70 per cent since mid-November, when Tesla’s debut in the S&P 500 was announced, and have soared 700 per cent so far in 2020.
Tesla’s addition to the S&P 500 meant index-tracking funds bought US$90.3-billion of shares by the end of Friday’s session so that their portfolios reflected the index, according to Mr. Silverblatt.
See also: Tesla heads to the S&P after meteoric rise and some investors want more
Enbridge Inc. (ENB-T) was down after it said on Monday that it will expand its liquids storage capabilities and connections through an acquisition of a facility from Blueknight Energy Partners, L.P. in Cushing, Oklahoma.
The purchase of the facility includes 34 storage tanks for a total storage of approximately 6.6 million barrels, which would take the company’s overall storage capacity at Cushing to approximately 26 million barrels, the company said.
The $132-million-dollar purchase is expected to close in the early part of 2021.
“This acquisition will provide connectivity to new production basins, Oklahoma and the Rockies, and support Enbridge’s strategy for directing barrels to the U.S. Gulf Coast,” the company added.
Cenovus Energy Inc. (CVE-T) and Husky Energy Inc. (HSE-T) fell in the wake of saying Monday that they have received all key regulatory approvals required for their proposed merger to create Canada’s No. 3 oil and gas producer.
Last week, the deal of about $6-billion was approved by shareholders of both the companies.
A recent recovery in oil prices has helped energy shares, boosting the value of the all-stock transaction by about 60 per cent from its initial $3.8-billion valuation in October, when the deal was first announced.
The deal, expected to close on Jan 1, comes amid a pandemic-driven demand collapse and weak oil prices which has forced the industry to consolidate.
Montreal-based Richelieu Hardware Ltd. (RCH-T) slid on news of a normal course issuer bid to repurchase for cancellation up to 1.5 million common shares, which represents 2.7 per cent of its issued and outstanding common shares as of Dec. 11.
Canopy Growth Corp. (WEED-T) in the wake of signing a deal valued at $297-million that will see it give up its ownership in Canopy Rivers Inc. (RIV-T), which it established as a venture capital firm to invest in the cannabis sector.
Under the agreement, Canopy Growth will receive exchangeable shares, warrants and debt in TerrAscend Corp., increasing its direct conditional ownership to 21 per cent from 13 per cent.
Canopy Growth will also increase ownership in Quebec greenhouse joint venture Vert Mirabel to 67 per cent from 41 per cent.
In exchange, Canopy Growth will pay Canopy Rivers, which plans to change its name, $115 million in cash and 3.75 million Canopy Growth shares.
It will also give back its nearly 36.5 million class-B multiple voting shares and 15.2 million class-A subordinate voting shares in Canopy Rivers.
The deal is subject to approval by a two-thirds majority vote by holders of Canopy Rivers multiple voting and subordinate voting shares, voting separately on a class basis, as well as a simple majority of disinterested holders of subordinate voting shares.
Converge Technology Solutions Corp. (CTS-X) fell after announcing the acquisition of Denver-based CarpeDatum Consulting Inc.
In a research note, Raymond James analyst Steven Li said: “We like this transaction - a lot. Extends their analytics practice and adds more high margin services/consulting solutions that they can upsell to expand margins and create value.”
Bombardier Inc. (BBD-B-T) dipped after Bombardier Transportation said it has signed a deal with TransLink to build 205 new rail cars for Vancouver’s SkyTrain network.
The contract is valued at $721-million and includes options for up to an additional 400 rail cars.
The new rail cars are being designed at Bombardier Transportation’s North American headquarters in St-Bruno, Que., and its facilities in Kingston, Ont.
They will be assembled and tested in Kingston before they are tested again and commissioned by Bombardier employees in Vancouver.
TransLink CEO Kevin Desmond says it’s the largest fleet procurement order it has ever undertaken.
Bombardier designed and supplied the original SkyTrain system.
Obsidian Energy Ltd. (OBE-T) dropped after extending its hostile takeover offer for Bonterra Energy Corp. (BNE-T) and lowering the minimum tender condition for its bid.
The company says it has lowered the minimum tender condition to 50 per cent. It had earlier required two-thirds of Bonterra’s outstanding shares.
The offer has also been extended to Jan. 25 from an earlier deadline of Jan. 4.
Obsidian has offered two of its shares for each Bonterra share.
The Bonterra board has urged shareholders to reject the offer and said that shareholders holding more than 33 per cent of the company’s shares have confirmed that they will not tender to the hostile offer.
Diamondback Energy Inc. (FANG-Q) fell after it said on Monday it would buy rival QEP Resources Inc. (QEP-N) for U.S. $555.2-million in an all-stock deal, as the U.S. shale industry rapidly consolidates to weather a pandemic-induced downturn.
The purchase will give Diamond around 49,000 more acres in the Midland region of the top U.S. oil field, the Permian basin in Texas, the most sought after region in recent mergers.
Diamondback is also buying lease interests and assets in Midland from privately held Guidon Operating LLC for over US$850-million, and it will now allocate most of its capital to the Northern Midland basin.
U.S. shale drillers are seeking to scale up and cut costs to survive lower oil production after COVID-19 lockdowns slashed global fuel demand through much of this year.
Recent deals in the Permian Basin include Pioneer Natural Resource Co’s US$4.5-billion buyout of Parsley Energy Inc. and ConocoPhillips’ US$9.7-billion deal for Concho Resources Inc.
On closing of the QEP and Guidon deals, Diamondback said its total leasehold interest in Midland will be over 276,000 acres.
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Lockheed Martin Corp. (LMT-N) fell after it agreed to buy U.S. rocket engine manufacturer Aerojet Rocketdyne Holdings Inc. (AJRD-N) for US$4.4-billion.
The deal is Lockheed’s biggest acquisition since Jim Taiclet took over as chief executive in June. He is seeking to beef up the company’s propulsion capabilities amid competition from new entrants such as SpaceX and Blue Origin, for space contracts with the U.S. government.
“Acquiring Aerojet Rocketdyne will preserve and strengthen an essential component of the domestic defense industrial base and reduce costs for our customers and the American taxpayer,” Mr. Taiclet said in a statement.
Lockheed said it will pay US$56 per share for Aerojet Rocketdyne, a 33-per-cent premium to Friday’s closing price. The purchase price will be reduced to US$51 per share after the payment of a pre-closing special dividend, Lockheed added.
The Bethesda, Maryland-based company already uses Aerojet Rocketdyne’s propulsion systems in its aeronautics, missiles and fire control offerings.
Lockheed said the transaction, which is set to be scrutinized by regulators given the company’s leading position in the defence sector, is expected to close in the second half of 2021.
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Planemaker Boeing Co. (BA-N) slipped on a U.S. Senate report saying Boeing officials “inappropriately coached” test pilots during recertification efforts.
The report from the Senate Commerce Committee Republican staff raised questions about testing this year of a key safety system known as MCAS tied to both fatal crashes was contrary to proper protocol.
The committee concluded Federal Aviation Administration (FAA) and Boeing officials “had established a pre-determined outcome to reaffirm a long-held human factor assumption related to pilot reaction time ... It appears, in this instance, FAA and Boeing were attempting to cover up important information that may have contributed to the 737 MAX tragedies.”
The report citing a whistleblower who alleged Boeing officials encouraged test pilots to “remember, get right on that pickle switch” prior to the exercise that resulted in pilot reaction in approximately four seconds, while another pilot in a separate test reacted in approximately 16 seconds.
The account was corroborated during an FAA staff interview, the committee added.
With files from staff and wires
David Leeder