A roundup of some of the North American equities making moves in both directions today
On the rise
Empire Company Ltd. (EMP-A-T) was higher with the premarket announcement it has signed a deal to buy a 51-per-cent stake in specialty grocery store chain Longo’s and its Grocery Gateway e-commerce business for $357 million.
The parent company of Sobeys says the deal adds two high-quality banners to its business and helps it grow in Ontario.
Under the deal, Longo’s and Grocery Gateway will continue to be led by CEO Anthony Longo.
However, Empire says Longo’s will be able to benefit from its infrastructure and capabilities, in areas such as sourcing, logistics and real estate.
Longo’s has 36 locations in the Greater Toronto Area, while Grocery Gateway serves 70,000 customers.
In a research note, ATB Capital Markets analyst Kenric Tyghe said: “We consider the acquisition of Longo’s to be positive to our thesis given (i) it increases the Company’s penetration in urban core of key Ontario markets, such as the GTA, where the Company believes it’s underrepresented (ii) improves the Company’s loyalty offering and (iii) is expected to be accretive to EPS in the first full fiscal year after closing, which will offset some of the dilution from the ramp of the Company’s Voilà program.”
Astrazeneca Plc (AZN-Q) was higher after the National Advisory Committee on Immunization said there is now enough “real-world evidence” to show its COVID-19 vaccine is both safe and effective for seniors.
The decision reverses a recommendation made by the body on March 1, when the panel of vaccine experts said AstraZeneca hadn’t included enough people over the age of 65 in its clinical trials.
NACI chair Dr. Caroline Quach said Tuesday that two studies of patients who received the vaccine in the United Kingdom have been released since then and show the AstraZeneca vaccine is both safe and effective for seniors, particularly against severe disease and hospitalization.
On Monday, Prime Minister Justin Trudeau offered reassurances on the safety of the Oxford-AstraZeneca COVID-19 vaccine on Monday as the list of European countries suspending its use due to safety concerns grew.
Germany, France, Italy and Spain on Monday joined other countries in Europe that have paused their use of the AstraZeneca vaccine over reports of blood clots in some recipients, even though European regulators say there’s no evidence the shot is to blame.
Moderna Inc. (MRNA-Q) was higher after announcing Tuesday it is beginning a study of its COVID-19 vaccine in children younger than 12 — one that will include babies as young as 6 months.
The announcement comes exactly a year after the first adult received a test dose of the shot, created at the National Institutes of Health. It’s now being used across the U.S. and in multiple other countries.
Moderna also has tested the vaccine in 12- to 17-year-olds but hasn’t yet released the findings. The study in younger children will be more complex, because researcher need to determine whether to us smaller doses than in adults and adolescents.
The study aims to eventually enrol about 6,750 children in the U.S. and Canada. That’s after a phase-in portion to determine the best dose to test in children age 2 and older and the right dose in those younger than 2.
Eli Lilly and Co. (LLY-N) was flat on news its experimental treatment for an inflammatory bowel disease succeeded in a late-stage trial.
The 12-week study was testing the efficacy and safety of mirikizumab in patients with moderate to severe ulcerative colitis, a chronic inflammatory disease of the colon that leads to ulcers causing abdominal pain, bloody stools and incontinence.
Mirikizumab met the main goal of reducing colon inflammation and frequency of stools in patients compared to placebo.
In addition, mirikizumab demonstrated rapid improvement in patient symptoms as early as four weeks after initiating treatment and met all secondary goals of the study, the company said.
U.S. drugmaker AbbVie Inc. (ABBV-N) gained after Reuters reported it is in discussions to sell a roughly US$5-billion portfolio of women’s drugs acquired last year through its US$63-billion purchase of Botox maker Allergan Plc.
The move revives a process to sell the business, which makes the Lo Loestrin Fe birth control pill, that Allergan started in 2018 only to ditch five months before being acquired by AbbVie in 2019.
AbbVie is working with investment bank Morgan Stanley on an auction process that has attracted interest from private equity firms including CVC Capital Partners, said the sources, speaking on condition of anonymity.
The portfolio generates 12-month earnings before interest, taxes, depreciation and amortization (EBITDA) of about $500 million and could be valued at about 10 times its EBITDA, the sources added.
On the decline
GFL Environmental Inc. (GFL-T) dipped after revealing it is set to acquire Terrapure Environmental Ltd. for $927-million, in a deal that will see the Canadian-based waste management giant further expand its customer base across the country and cement its position as one of the biggest waste management providers in North America.
Based in Burlington, Ont., Terrapure is a waste management company that owns more than 500 collection vehicles and employs approximately 1,600 workers, generating revenue of $365-million in 2020. The acquisition will see GFL acquiring all of Terrapure’s assets except its battery-recycling business.
“Terrapure’s assets are highly complementary to our existing solid and liquid waste footprint in Canada,” said Patrick Dovigi, founder and chief executive of GFL, in a statement released Monday evening. Mr. Dovigi added that GFL provides all of the same services as Terrapure, which creates cross-selling opportunities and potential to expand into new regions, particularly Atlantic Canada.
- Vanmala Subramaniam
Ford Motor Co. (F-N) dropped after announcing a US$2-billion convertible debt deal.
It also said on Tuesday that the next version of its Transit van for the European market will go into production in Turkey in 2023 and include fully electric and hybrid variants along with the combustion-engined version.
The vans will be built by Ford Otosan, the No. 2 U.S. automaker’s joint venture in Turkey.
Ford Otosan will also make a one-tonne commercial vehicle for Volkswagen AG as part of an alliance between Ford and the German carmaker.
Ford is the top commercial vehicle brand in Europe with a 15% share, and has led the commercial van market in Britain, Europe’s largest, for 56 years.
With files from staff and wires