A roundup of some of the North American equities making moves in both directions today
On the rise
“We view the deal as positive for Calian as it adds to the company’s margin profile and increases its recurring revenue base in the fast-growing health tech sector,” said Acumen Capital analyst Jim Byrne in a research note.
Goodyear Tire & Rubber Co. (GT-Q) made big gains in the wake of the premarket announcement that it would acquire Cooper Tire & Rubber Company (CTB-N) for about US$2.8-billion to double its presence in North America and China.
Goodyear said the deal also broadens the distribution for Cooper replacement tires through its retail store network.
Under the terms of the deal, Cooper shareholders will receive US$41.75 per share in cash and a fixed exchange ratio of 0.907 shares of Goodyear common stock.
The implied cash and stock consideration for Cooper shareholders is US$54.36 per share, representing a premium of 24 per cent to its closing price on February 19.
After the deal closure, Goodyear shareholders will own about 84 per cent of the combined company, which will be headquartered in Ohio, while Cooper shareholders will own about 16 per cent.
Royal Caribbean Cruises Ltd (RCL-N) was up in the wake of reporting a billion-dollar net loss for the fourth straight quarter on Monday, as the cruise operator continued to be affected by a coronavirus-triggered halt to voyages.
Cruise operators have been shoring up cash reserves by issuing new shares, selling assets or raising billions of dollars in debt over the last few months as the virus outbreak brought the industry to a virtual standstill.
With its ships not sailing, the company’s total revenue for the reported quarter plunged to US$34.1-million from US$2.52-billion last year. Analysts had expected a revenue of $35.6 million, according to Refinitiv IBES data.
As of December end, Royal Caribbean had about US$4.4-billion in liquidity, up from about US$3.7-billion at the end of the third quarter, after it raised $1 billion in a stock offering during the fourth quarter.
The operator of “Oasis of the Seas” and “Symphony of the Seas” cruises posted a net attributable loss of US$1.37-billion, or US$6.09 per share, in the quarter ended Dec. 31, compared with a profit of US$273.1-million, or US$1.30 per share, a year earlier.
Kohl’s Corp. (KSS-N) soared after a group of activist investors with a combined 9.5-per-cent stake in the U.S. retailer said on Monday it has nominated nine directors to the troubled chain’s board, as it looks to improve profits at the company.
Kohl’s shares have lost 20 per cent in value last year as the company’s sales declined further due to the COVID-19 pandemic.
The group including Macellum Advisors GP LLC, Ancora Holdings Inc, Legion Partners Asset Management LLC and 4010 Capital LLC is pushing the company to add directors with retail experience, reduce inventory levels and consider a sale-leaseback of some of its real estate.
The investors believes Kohl’s could generate more than US$10 in annual earnings per share within the next few years and drive its stock price twice as high current levels.
Kohl’s like other U.S. department stores was struggling to boost sales even before the COVID-19 pandemic, as consumers shifted to online-centric, off-price and deeper-pocketed big-box retailers.
The group’s stake and nominations were first reported by the Wall Street Journal on Sunday.
On the decline
Just Energy Group Inc. (JE-T) plummeted after it forecast a US$250-million loss from the impact of winter storms sweeping across Texas and warned on its ability to continue as a going concern.
An arctic air mass that spread into an area unused to such low temperatures killed at least two dozen people in Texas and knocked out power to more than 4 million at its peak. It also hit natural gas and electric generation, cutting supplies needed to run the plants along the U.S. Gulf Coast.
Governor Greg Abbott said on Sunday, Texas utility regulators will temporarily ban power companies from billing customers or disconnecting them for non-payment, after the deadly winter storm that caused widespread blackouts.
The company said the extreme weather condition would hit its liquidity and that it was in talks with its key stakeholders.
Just Energy, which has operations in the United States and Canada, intends to file its third-quarter results on or about Feb. 26 and said it had imposed a blackout on trading of the company’s securities by directors and officers until then.
Toronto-based special purpose acquisition corporation NextPoint Acquisition Corp. (NAC.U-T) dipped after announcing definitive agreements to acquire Liberty Tax and LoanMe. The combined business, to be named NextPoint Financial Inc..
“The combination of Liberty Tax and LoanMe positions NextPoint to become a leading one-stop financial services superstore destination for credit-challenged consumers and small businesses, a customer demographic generally overlooked by traditional financial institutions,” it said. “The combination of Liberty Tax and LoanMe provides the anchor for a platform which NextPoint intends to expand with an array of financial products and services. Through increased financial connectivity with its customer base, NextPoint expects to strengthen and expand its customer relationships, grow its revenue sources and drive value to its investors.”
The Toronto-based miner said the interest rate and other terms will be determined at pricing and are dependent upon market conditions and other factors.
Hudbay plans to use the net proceeds fto refinance outstanding US$600-million aggregate principal amount of 7.625-per-cent senior notes due 2025.
NFI Group Inc. (NFI-T) was narrowly lower despite subsidiary Alexander Dennis Limited announcing that Hong Kong’s largest bus operator The Kowloon Motor Bus Company (1933) Limited has ordered 56 Enviro500 three-axle double deck buses.
The new buses are scheduled to be delivered in the second half of 2021.
Mogo Inc. (MOGO-T) fell after announcing a plan to 5.35 million common shares at US$10.10 each in a registered direct offering, representing a 25.35-per-cent discount to Friday’s last close.
Gross proceeds are expected to to be approximately US$54-million with a portion used to fund the cash component of its initial purchase price of the previously announced investment in Coinsquare Ltd.
Boeing Co. (BA-N) dropped after a United Airlines (UAL-Q) plane’s engine shed debris over Denver on Saturday, prompting the planemaker to urge airlines to suspend the use of its 777 jets with Pratt & Whitney 4000 engines.
Raytheon Technologies Corp. (RTX-N), which owns Pratt & Whitney, also fell.
United said Sunday it is temporarily removing the aircraft from service, a day after one of its planes made an emergency landing at Denver International Airport because its right engine blew apart just after takeoff. Pieces of the casing of the engine, a Pratt & Whitney PW4000, rained down on suburban neighbourhoods. None of the 231 passengers or 10 crew on board was reported hurt, and the plane landed safely, authorities said.
U.S. Federal Aviation Administration Administrator Steve Dickson said in a statement Sunday that based on an initial review of safety data, inspectors “concluded that the inspection interval should be stepped up for the hollow fan blades that are unique to this model of engine, used solely on Boeing 777 airplanes.”
With files from staff and wires