A roundup of some of the North American equities making moves in both directions today
On the rise
Calfrac Well Services Ltd. (CFW-T) rose 10.7 per cent on Tuesday after investor Wilks Brothers LLC announced it has submitted a restructuring plan to reduce the company’s debt, and that its terms were better than those proposed by Canadian oilfield service provider’s management.
Wilks Brothers’ rival plan, which would give it 60-per-cent equity ownership for $236-million in consideration, follows two earlier bids by the group to buy Calfrac’s U.S. operations. Both bids were rejected by Calfrac’s board.
The investor group holds about 19.78 per cent of Calfrac’s shares and more than 50 per cent of its second-lien notes, and also owns ProFrac Services Ltd, a competitor of Calfrac in the United States.
Boeing Co. (BA-N) gained 1.7 per cent after the U.S. Federal Aviation Administration said on Monday it is proposing requiring four key 737 MAX design and operating changes to address safety issues seen in two fatal crashes that led to the plane’s grounding in March 2019.
The agency is issuing a proposed airworthiness directive to require updated flight-control software, revised display-processing software to generate alerts, a revision of certain flight-crew operating procedures and changes in the routing of some wiring bundles.
While the measures align with those expected by Boeing and aerospace analysts for months, the announcement comes after a series of delays and sets in motion the final sequence of events that could lead to the FAA lifting a grounding order on the plane later this year.
Ford Motor Co. (F-N) rose 2.2 per cent in the wake of saying on Tuesday acting chief operating officer Jim Farley will take over as chief executive officer effective Oct. 1.
Farley will replace Jim Hackett who is retiring from the company.
Take-Two Interactive Software Inc. (TTWO-Q) sat 5.9 per cent higher after it raised its fiscal year adjusted sales forecast after beating quarterly estimates on demand for its videogame franchises, including Grand Theft Auto, from people stuck at home due to lockdowns.
June spending on video games in the United States surged 26 per cent to US$1.2-billion, the highest for the month in over a decade according to research firm NPD, as sheltered-at-home people looking for entertainment turned more to games and also purchased virtual in-game content across platforms.
Take-Two’s Grand Theft Auto V, which released in 2013, was the fourth best-selling game in June across all platforms, according to NPD.
The company also forecast better-than-expected adjusted sales for its second quarter, a period which includes the scheduled launch of NBA 2K21, the new title in its annualized basketball franchise.
Take-Two estimated adjusted sales in the range of US$775-million to US$825-million, while analysts were expecting US$747.9-million.
Florida-based fertilizer maker Mosaic Co. (MOS-N) jumped 13.5 per cent after its second-quarter results exceeded the Street’s expectations.
It reported earnings per share of 11 US cents, topping the consensus estimate of a 1 US cent loss.
“Mosaic’s results this quarter reflect the accelerated pace of our cost structure transformation, excellent execution throughout our production and supply chain functions, and strengthening markets,” said President and CEO Joc O’Rourke. “We expect significant further cost progress in the years ahead.”
Money manager CI Financial Inc. (CIX-T) increased 0.1 per cent after it announced it will buy Illinois-based Balasa Dinverno Foltz LLC, a private wealth management firm with US$4.5-billion in assets. The companies did not reveal the terms of the transaction.
The purchase of BDF is part of chief executive Kurt MacAlpine’s plans to continue CI’s expansion outside of Canada. The Toronto-based company had just under $180-billion in assets under management at June 30 across its multiple wealth management businesses.
It’s the fifth U.S. deal and the largest CI has announced since last December, when it said it would acquire a majority stake in a Phoenix wealth manager with US$377-million in assets. Since then CI has made majority or minority investment in the other four firms, each with at least US$1-billion under management. Three wholly owned CI subsidiaries have made U.S. investments in addition to the ones that CI has made directly. The headquarters of CI’s targets have ranged from California to Arkansas to Boston.
- David Milstead
Bausch Health Companies Inc. (BHC-T) rose 3.4 per cent after the U.S. Securities and Exchange Commission (SEC) said on Friday it has agreed to pay $45 million, and three of former top executives also agreed to penalties, to settle charges of improper revenue recognition and misleading disclosures in U.S. regulatory filings.
On the decline
Alimentation Couche-Tard Inc. (ATD.B-T) was down 0.7 per cent in reaction to the news that the Japanese owner of 7-Eleven convenience stores has agreed to buy Marathon Petroleum Corp’s Speedway gas stations for US$21-billion.
The move will help Seven & i Holdings Co Ltd shift focus beyond Japan, where its stores and supermarkets face a shrinking population, slow economic growth and tough price competition.
Couche-Tard, Seven & i Holdings and private equity firm TDR Capital had prepared rival bids late last month for Speedway, Reuters reported in July.
The acquisition is one of the biggest this year, suggesting the pandemic, while forcing many companies to focus on protecting balance sheets instead of expansion, has not killed off global dealmaking altogether.
The deal boosts its 7-Eleven store count in the United States and Canada to about 14,000, adding to a portfolio fattened three years ago with a $3.3 billion purchase from Sunoco LP - furthering its convenience store lead over Couche-Tard.
ATB Capital Markets analyst Chris Murray said: “We see this acquisition as positive as it further allows Quest to vertically integrate in key markets, which provides benefits on schedule, quality and furthering business development opportunities.”
Ralph Lauren Corp. (RL-N) reported a bigger-than-expected 66-per-cent fall in quarterly revenue on Tuesday, as it struggled with the coronavirus-led closures of its outlets and department stores across the world.
Shares of the New York-based fashion house fell 4.5 per cent.
The company’s quarterly revenue slumped 77 per cent in North America, with analysts saying demand for high-end handbags, apparel and accessories is not expected to rebound quickly as the global economy enters a deep recession.
The company reported a net loss of US$127.7-million, or US$1.75 per share, in the first quarter ended June 27, compared with a profit of US$117.1-million, or US$1.47 per share, a year earlier.
Excluding certain items, Ralph Lauren reported a loss of US$1.82 per share, while analysts were expecting a loss of US$1.72 per share.
With files from staff and wires