A roundup of some of the North American equities making moves in both directions
On the rise
Sun Life Financial Inc. (SLF-T) rose after it said on Sunday it has agreed to buy oral health care company DentaQuest for $2.47-billion.
The transaction will be financed using cash and debt, Sun Life said in a statement, adding that the deal is expected to close in the first half of 2022.
Sun Life expects the acquisition to add about $100-million to its underlying income from the U.S. in its first full-year after closing, executives said on an analyst call on Monday.
The acquisition of the U.S.’s second-largest provider of dental benefits, with 33 million members, gives Sun Life the “flexibility to maneuver” in future and make additional investments, as well as to take advantage of proposed expansions of health care funding in the U.S, the executives said.
In a research report released Monday, Desjardins Securities analyst Doug Young said: “In our opinion, the acquisition is bang on strategy, helps put capital to work and is accretive to underlying EPS and ROE. That said, DentaQuest leans more toward providing dental coverage through government programs, a segment we are less familiar with, and this segment of the market could be more subject to government-related risks.”
Magna International Inc. (MG-T) was flat after announcing the termination of its merger agreement with Swedish auto-parts maker Veoneer (VNE-N).
The Aurora, Ont.-based company said it has waived its four-day matching period to make a counterproposal after Veoneer’s board determined that the competing proposal by Qualcomm Inc. is superior. Veoneer will pay a termination fee of US$110-million to Magna.
In early September, Qualcomm made a formal US$37 per share bid for Veoneer in line with the offer announced last month and above Magna’s originalUS $31.25 per share offer.
Qualcomm offered US$4.6-billion to buy Veoneer in August, an 18.4-per-cent premium to a July bid worth around US$3.8-billion by Magna that had already been accepted by Veoneer’s board.
Surge Energy Inc. (SGY-T) gained after saying it has signed a deal to buy Fire Sky Energy Inc. in an agreement valued at $58-million.
Fire Sky owns assets producing more than 1,500 barrels of oil equivalent per day focused in Surge’s core area in southeast Saskatchewan.
The deal will see Surge issue 11.2 million shares and assume about $3 million in net debt.
Surge says the transaction adds highly concentrated light oil reserves, production, land and infrastructure in a core area for the company.
The deal is expected to close by Oct. 30.
Surge forecasts that following the transaction its average production next year will be 21,500 barrels of oil equivalent per day.
Tesla Inc. (TSLA-Q) rose as it said on Saturday it had delivered a record electric cars in the third quarter, beating Wall Street estimates after Chief Executive Elon Musk asked staff to “go super hardcore” to make a quarter-end delivery push.
Tesla has weathered the chip crisis better than rivals, with its overall deliveries surging 20 per cent in the July to September period from its previous record in the second quarter, marking the sixth consecutive quarter-on-quarter gains. .
In China, rising exports to Europe and the introduction of a cheaper Model Y helped boost Tesla’s production, analysts said.
Mr. Musk said Tesla suffered an extremely severe parts shortage earlier in the third quarter and had urged employees to make quarter-end delivery push, Reuters reported last month, citing an internal company email.
“The end of quarter delivery wave is unusually high this time,” he said in the email.
Tesla delivered 241,300 vehicles globally in the July to September quarter, up 73 per cent from a year earlier. Analysts had expected the electric-car maker to deliver 229,242 vehicles, according to Refinitiv data.
See also: Monday’s analyst upgrades and downgrades
Merck & Co. (MRK-N) continued to rise after developing an experimental antiviral pill that could halve the chances of dying or being hospitalized for those most at risk of contracting severe COVID-19.
On Friday, its shares jumped as much as 12.3 per cent and hit their highest level since February 2020 after data showed the company’s pill molnupiravir could halve the chances of dying or being hospitalized for those most at risk of contracting severe COVID-19. Experts hailed the news as potentially a huge advance in the fight against COVID-19.
On the decline
Mississauga-based Bird Construction Inc. (BDT-T) slipped in the wake of the premarket announcement that it has been awarded the first phase of the Engineering, Procurement, and Construction contract with early collaborative contractor involvement for the Ontario Power Generation’s Clarington Corporate Campus Project.
This project will establish a new corporate headquarters within the Durham Region of Ontario.
With files from staff and wires
David Leeder