A survey of North American equities heading in both directions
On the rise
Descartes Systems Group (DSG-T) was up 1.2 per cent on Monday after saying it has acquired Aerospace Software Developments in a deal worth about $83-million.
Under the transaction, Descartes will pay a total of about 57 million euros for the Dublin-based company.
ASD provides customs declaration software for logistics services providers and shippers.
The company also sells systems that help airlines track assets.
Descartes says the acquisition of ASD is highly complementary to its current product offerings.
Based in Waterloo, Ont., Descartes provides software for logistics-intensive businesses.
Business software maker Salesforce (CRM-N) was higher by 1.3 per cent as it backed away from its talks to acquire data-management software firm Informatica (INFA-N) after the two companies could not agree on terms, a person familiar with the matter told Reuters on Sunday.
The talks between the two companies were at an advanced stage earlier in April, Reuters reported. If the two sides had agreed on a deal, it would’ve ranked as one of Salesforce’s biggest acquisitions.
Salesforce had been discussing a price for Informatica in the mid-US$30s a share, according to the Wall Street Journal, which reported earlier on Sunday that the talks between the two sides had fizzled. When news of the deal talks first broke on April 12, Informatica’s shares were trading at US$38.48.
Informatica’s shares closed at US$35.19 on Friday, valuing the Redwood City, California-based company at about US$11.2-billion, including debt.
Founded in 1993, Informatica offers subscription-based data management services over the cloud and helps automate tasks for more than 5,000 active customers. Informatica’s customers include Unilever and Deloitte, according to the company’s website.
Vista Outdoor (VSTO-N) said it was engaging in discussions with investment firm MNC Capital for a better deal than its all-cash offer to acquire the sporting and outdoor products maker for US$3-billion.
The company’s shares were up 6.5 per cent in Monday trade.
MNC Capital had in March raised its all-cash bid to acquire Vista to US$37.50 per share, or US$3-billion, after the company turned down its earlier offer of US$2.90-billion.
Vista is already in talks to sell its sporting goods unit, which includes its guns and ammunition business, to privately-held Czech defence and civil manufacturing company Czechoslovak Group (CSG) in a US$1.91-billion deal.
The company adjourned its special meeting of shareholders to June 14 from May 16 given the talks with MNC, and added that it continues to recommend its stockholders to vote in favor of the deal with CSG.
Vista said that MNC’s proposal undervalues its performance gear business, named Revelyst, and added that its board does not consider MNC’s revised offer to be superior to the transaction with CSG.
The Anoka, Minnesota-headquartered company said it remains confident that its merger with CSG would receive clearance from the Committee on Foreign Investment in the United States (CFIUS).
In March, Vista said that MNC’s US$2.9-billion takeover offer did not take into account the significant shareholder value that was expected to be created through the separation of its outdoor products and sporting goods segments.
On the decline
Shares of Gildan Activewear Inc. (GIL-T) declined 1.2 per cent on Monday in response to the reshaping its board of directors as it seeks to choke off a proxy campaign by dissident shareholders ahead of its annual meeting next month.
The Canadian clothing maker is replacing five directors, including current chairman Donald Berg, with new faces effective May 1. And it’s proposing to add two directors from a competing slate being championed by activist shareholder Browning West to replace two current directors not standing for re-election.
In all, the refresh would see seven of 12 directors swapped out, according to a Gildan statement.
“The slate that’s been proposed is to say ‘We’ve listened. We want to end the drama. We want to get on with building value,’ " said Tim Hodgson, a veteran investment banker who’ll take over as Gildan chairman next month. The board backs chief executive officer Vince Tyra but will hold him accountable to deliver, he said.
Gildan’s board is locked in a feud with U.S. investment firm Browning West and other shareholders over its decision to dismiss long-time CEO Glenn Chamandy in December and replace him with Mr. Tyra, a former executive at Fruit of the Loom. Directors say Mr. Chamandy sought to entrench himself as CEO but some shareholders say the board botched the succession process and want him back.
Browning West, which holds a roughly 5-per-cent stake in Gildan, is seeking to remove eight of Gildan’s 12 sitting directors and replace them with its own nominees. The matter will come to a head at the company’s annual meeting, scheduled for May 28, if it isn’t resolved before then.
Nine institutional investors holding an estimated 35 per cent of Gildan’s stock have called for Mr. Chamandy’s reinstatement, saying Mr. Tyra isn’t qualified to lead the company. Exactly how many of those have changed their minds or sold down their positions was not immediately clear.
- Nicolas Van Praet and Andrew Willis
G Mining Ventures Corp. (GMIN-T) dropped 10.1 per cent after announcing a definitive agreement to combine with Reunion Gold Corp. (RGD-X) in a deal valued at $875-million.
Through the deal, Brossard, Que.-based G Mining will acquire Reunion’s flagship Oko West Project in Guyana.
Shareholders of both companies will receive common shares of a newly formed company equivalent to Reunion shareholders being issued 0.285 G Mining common shares for each RGD common share. In addition, Reunion shareholders will receive common shares in a newly created gold explorer that will hold all of Reunion’s assets other than Oko West. G Mining has agreed to fund SpinCo with $15-million.
“Oko West has emerged as a globally significant gold discovery over the last few years, with excellent potential to become a top tier deposit that could support a large, long-life mine complex to accelerate GMIN’s vision of building a leading intermediate gold producer,” the companies said in a release. “The GMIN team, including through the Gignac Family-owned G Mining Services, has an impressive track-record of executing world-class projects in the Guiana Shield region to generate industry leading returns for its stakeholders.
“GMIN plans to move Oko West quickly through technical studies to a construction decision, leveraging the considerable amount of exploration, development, and permitting work that has already been completed by RGD, supported by the expected free cash flow from the Tocantinzinho Gold Project, which is trending on schedule and on budget for commercial production in the second half of 2024. The Transaction sets the stage for the creation of an Americas focused leading intermediate gold producer.”
Verizon Communications (VZ-N) said it lost fewer-than-expected wireless subscribers in the first quarter thanks to its flexible plans and streaming bundles offering discounted pricing for services such as Netflix (NFLX-Q) and Warner Bros Discovery’s (WBD-Q) Max.
Shares of the U.S. telecom firm closed down 4.7 per cent.
It lost 68,000 monthly bill-paying wireless phone subscribers between January and March - a seasonally soft period for the industry after the holiday quarter.
That compared with an estimated loss of 100,000, according to FactSet, and a loss of 127,000 in the first quarter of 2023.
The New York-based company said last month that a majority of its customers were opting for its premium, customizable myPlan option, which has resonated well with consumers.
Verizon has also partnered with streaming services to attract customers. Starting last Thursday, its latest promotional bundle includes six months of free access to Disney’s services for new and existing customers on some plans.
In December, it began offering discounted subscriptions to Netflix and Max on some myPlan bundles.
Verizon’s consumer business saw its best first-quarter performance since 2018, with 158,000 wireless retail postpaid phone net losses, compared with 263,000 losses a year ago.
The firm reported revenue of US$33-billion for the quarter, compared with an LSEG estimate of US$33.24-billion, as phone upgrade levels continue to drift lower.
Excluding items, the company reported a profit of US$1.15 per share, beating an LSEG estimate of US$1.12 per share.
Tesla (TSLA-Q) fell 3.4 per cent on Monday, as its latest global price cuts fanned Wall Street concerns about dwindling margins at the electric-vehicle maker in the run-up to its earnings report later this week.
The company slashed prices by up to US $2,000 on its vehicles such as the Model 3 and Model Y in several markets including the U.S., China and Germany over the weekend, in its latest effort to push demand slowed by high interest rates.
The cuts come ahead of its quarterly earnings on Tuesday, where the world’s most valuable automaker is expected to post its first revenue drop and lowest gross margin in nearly four years, according to LSEG data.
Investors are awaiting clarity from CEO Elon Musk on Tesla’s strategy after he cut 10 per cent of the company’s staff last week and said focusing on autonomous driving was a “blindingly obvious” move.
Musk had earlier this month announced an event in August to unveil “Robotaxi,” after a Reuters report on April 5 said Tesla had scrapped its plan to develop its long-awaited affordable EV in favor of robotaxis. Musk said after the report that “Reuters is lying,” without citing any inaccuracies.
Wedbush Securities analyst Dan Ives wrote in a preview note last week that the earnings would be a “moment of truth” and “one of the most important moments in the company’s history.”
Tesla shares were down at US$142.05 on Monday. The shares have lost about 41 per cent of their value so far this year with surveys and experts saying Musk’s tilt toward right-wing politics and polarizing public statements turned away some prospective buyers of its cars.
Monday’s drop erased about nearly US$20-billion from its market value of US$468-billion, based on its total outstanding shares.
Uranium miner Energy Fuels Corp. (EFR-T) slid 10.1 per cent after it announced a deal to buy Australia’s Base Resources for about $241-million.
The Lakewood, Colo.-based company will acquire 100 per cent of Base’s issued shares in exchange for 0.0260 shares of Energy Fuels and 6.5 Australian cents each.
With files from staff and wires
David Leeder