A roundup of some of the North American equities making moves in both directions
On the rise
Tim Hortons-parent Restaurant Brands International Inc. (QSR-T) rose in early trading after saying on Monday it would buy Firehouse Subs for US$1-billion in an all-cash deal as it adds the U.S. sandwich chain to its roster of popular outlets, including Tim Hortons and Popeyes.
The deal would immediately add to Restaurant Brands’ earnings, the company said.
Jacksonville-based Firehouse Subs’ system-wide sales would be about US$1.1-billion for 2021, with October U.S. same-store sales about 20 per cent higher from pre-pandemic levels two years ago, Restaurant Brands said.
Restaurant Brands said it planned to fund the deal, expected to close in the coming months, through a combination of cash on hand and debt.
MindBeacon Holdings Inc. (MBCN-T) jumped after agreeing to a takeover by TSX Venture-listed CloudMD Software and Services Inc. (DOC-X) for $116-million or $4.78 a share, extending a disappointing fall for new Toronto Stock Exchange-listed tech companies.
The price, consisting of $1.22 in cash and 2.285 common shares of CloudMD for each share of MindBeacon, amounts to barely half the $8-a-share price that the Toronto-based telemedicine company sold for in an oversubscribed $75-million initial public offering 11 months ago. MindBeacon shares soared 22 per cent to $4.15 during Monday trading on news of the deal.
MindBeacon chief executive officer Dan Clark said in an interview that the company had explored a sale for months, and had been approached by multiple suitors before agreeing to a deal with CloudMD. “Part of our strategic road map, from the beginning, was making our services available alongside other primary-care services. It’s an easier choice for employers – to be able to go to one vendor for different health services.”
- Sean Silcoff and Vanmala Subramaniam
George Weston Ltd. (WN-T) gained after it agreed to sell the remainder of its bakery division, which produces cookies, crackers, cones and wafers for retail and foodservice businesses in the United States and Canada, for $370-million.
The Toronto-based company announced the planned sale to Illinois-based Hearthside Food Solutions, LLC on Monday. The deal follows George Weston’s announcement last month of the $1.2-billion sale of its Weston Foods fresh and frozen bakery business – which produces brands such as Wonder Bread, ACE Bakery and Country Harvest – to Toronto-based FGF Brands Inc.
The deal announced Monday represented roughly a quarter of Weston Foods’s net sales last year. Hearthside provides food packaging services and produces foods such as baked goods, snacks, sandwiches and entrees.
- Susan Krashinsky Robertson
Great-West Lifeco Inc. (GWO-T) increased on the premarket announcement that it is raising its quarterly dividend to shareholders by 12 per cent.
The insurance company says it has declared an additional dividend of 5.2 cents per share, payable on Dec. 31 to shareholders of record at the close of business on Dec. 3.
Combined with its dividend of 43.8 cents per share announced Nov. 3, Great-West will pay a total quarterly dividend of 49 cents per share.
The Office of the Superintendent of Financial Institutions lifted COVID-19-related restrictions on Nov. 4 that had prevented federally regulated banks and insurers from raising dividends and buying back shares.
Great-West says it has set a target dividend payout ratio range of 45 to 55 per cent of its base earnings.
Great-West CEO Paul Mahon says the new target dividend payout range supports a balanced approach to dividend increases in line with expected earnings growth while maintaining financial strength.
Calgary-based Tidewater Renewables Ltd. (LCFS-T) rose after it announced a multi-year agreement with an investment-grade company to sell British Columbia Low Carbon Fuel Standard (BC LCFS) credits that it says it will receive through the construction of the Renewable Diesel & Renewable Hydrogen Complex at Prince George, B.C. “at values higher than previously budgeted.”
In a research note, ATB Capital Markets analyst Nate Heywood said: “Overall, we view the agreement as positive for TWR and its development of the renewable diesel and renewable hydrogen complex. Additionally, this update is positive for the general near-term credit market outlook considering the agreed upon pricing of $425/credit and 125,000 credit volume. As of Q3/21, TWR has cited that the flagship 3,000 bbls/d refinery project remains on time and on budget ($215-$230-million).”
Boeing Co. (BA-N) jumped after Emirates announced an order for two 777 Freighters to be delivered in April and June 2022.
The U.S. planemaker is also in advanced discussions to sell a proposed new freighter version of its 777X passenger plane, Ihssane Mounir, senior vice president of commercial sales and marketing said on Saturday
Commercial flying had achieved a “strong foothold” after COVID-19 lockdowns, Mr. Mounir said at a news conference on the eve of the Dubai Airshow.
Saudi Arabian Airlines is in talks with Airbus and Boeing for a wide-body jet order, with a decision expected next year, its chief executive said on Sunday.
The state-owned carrier, also known as Saudia, is planning to expand rapidly over the next eight years as part of a government strategy to transform the kingdom into a transport hub.
“It’s a good size fleet order that will have to be placed,” Chief Executive Ibrahim Koshy told Reuters at the Airshow, without disclosing how many aircraft it would order.
Dollar Tree Inc. (DLTR-Q) saw large gains after activist investor Mantle Ridge LP disclosed stake and an additional economic exposure that represent about 9.8 per cent of outstanding shares.
J.P. Morgan analysts say that equates to at least US$1.8-billion stake. Refinitiv data shows the discount retailer has a US$25.43-billion market capitalization.
Before the bell, an equity analyst at Deutsche Bank upgraded the company’s shares to “buy” from “hold,” seeing an improved risk/reward proposition for investors given a greater sense of urgency with Mantle Ridge’s influence
Top U.S. meatpacker Tyson Foods Inc. (TSN-N) was narrowly higher despite beating quarterly profit estimates on Monday and forecasting fiscal 2022 revenue above market expectations on rising meat prices and improving demand from restaurants that have reopened after COVID-19 restrictions.
The Springdale, Ark.-based company reported a double-digit jump in sales and earnings in the fiscal fourth-quarter ended Oct. 2.
“We delivered a record performance in our beef segment and experienced share gains in our retail core business lines ... while supporting the continued recovery in foodservice,” CEO Donnie King said.
Pent-up demand for dine-in experiences, newer meat items on restaurant menus and a boom in Chinese demand for U.S. pork and beef have worked in favor of American meat processing firms.
Increased costs for labor, transportation and items such as feed grain and packaging have created headaches, however.
Tyson reported about US$335-million in direct costs in fiscal 2021 related to COVID-19, including protective equipment, testing and vaccinations for employees. The total did not included indirect costs such as higher meat product inputs, transportation and plant inefficiencies that have sent consumer meat prices soaring.
Top aides to President Joe Biden blamed Tyson and other large meat rivals that control much of the meat processing sector for rising food prices.
Tyson has rejected those assertions and instead blamed the pandemic and the U.S. labor shortage for limiting production.
The Jimmy Dean sausages maker said it was expecting sales to be about US$49-billion to US$51-billion for fiscal 2022, compared with market estimates of US$47.99-billion, according to Refinitiv IBES.
Sales rose to US$12.81-billion in the fourth quarter from US$11.46-billion a year earlier. Analysts on average were expecting sales of US$12.66-billion, according to Refinitiv IBES.
Net income attributable to Tyson increased to US$1.36-billion, or US$3.71 per share, from US$654-million, or US$1.79 per share, a year earlier.
Excluding one-off items, Tyson earned US$2.30 per share, compared with estimates of US$2.03.
On the decline
Pot producer Trulieve Cannabis Corp. (TRUL-CN) erased big early gains after it reported a 64.4-per-cent jump in quarterly revenue on Monday, as demand continued to rise for cannabis and related products even after the easing of pandemic restrictions.
The cannabis industry was the biggest beneficiary of pandemic-induced lockdowns, with an uptick in consumer appetite for pot products for recreational and relaxation purposes.
Retail stores are now witnessing even higher traffic, as both new and old customers visit after Canada relaxed its pandemic-era curbs.
Trulieve’s revenue rose 64 per cent from a year earlier to US$224.1-million in the three months ended Sept. 31.
The company had completed its US$2.1-billion buyout of medical pot producer Harvest Health & Recreation Inc in October. Trulieve and Harvest’s combined revenue in the third quarter was around US$316-million.
Trulieve’s profit rose 7 per cent to US$18.6-million in the quarter, which included a US$16.4-million one-time compensation and transaction costs related to the Harvest deal.
After its shares soared over 15 per cent on Friday with the news it will be bought by Sundial Growers Inc. (SNDL-Q), Alberta-based liquor and cannabis retailer Alcanna Inc. (CLIQ-T) ended lower in the wake of saying third-quarter same-store liquor sales from continuing operations fell 5 per cent year-over-year to $145.4-million.
Sales were $184.6-million versus $177-million a year ago and below analysts’ expectations of $193.7-million, according to S&P Capital IQ. Its net loss was $3.7-million or 4 cents per share versus a profit of $1.1-million or 3 cents a year ago.
Tesla Inc. (TSLA-Q) stock extended its recent selloff on Monday, pushing the electric-car maker’s market value below US$1-trillion as investors reacted to CEO Elon Musk’s recent share sales of a combined US$6.9-billion.
Tesla’s stock dropped 4.2 per cent in early afternoon trading to about $989, leaving the company’s market capitalization down about US$230-billion since before Mr. Musk began selling shares last week.
The latest stock decline follows a Sunday dispute on Twitter between Mr. Musk, the world’s richest person, and Bernie Sanders after the U.S. senator demanded that the wealthy pay their “fair share” of taxes.
At the current stock price, it would be the first time Tesla’s market value has ended a session below US$1-trillion since it first breached that level late last month.
“Tesla shares have been sinking post the sale based on a Twitter poll last week. And Musk’s Sunday tweet deriding a senior politician may add pressure on the stock in the coming weeks,” said Kunal Sawhney, CEO of equity research firm Kalkine Group.
“By offloading shares worth billions of dollars, Elon Musk is likely to accrue a tax bill of around $15 billion.”
Mr. Musk sold 6.36 million Tesla shares last week after floating the idea in a Twitter poll. He would need to offload about 10 million more to fulfill his pledge to sell 10% of his holdings in the electric-vehicle maker.
Fueled by thirst on Wall Street for electric vehicle makers, Tesla’s stock has surged more than 140 per cent in the past 12 months. The recent selloff has the stock at its lowest level since late October.
With files from Brenda Bouw, staff and wires