The ramp-up in Uranium One Inc.'s stock price ahead of its takeout by Russian partner ARMZ had us fully prepared to write a long piece detailing the prescient stock moves that have, in the past, been a regular feature of many Canadian merger-and-acquisition deals. But a close review of recent transactions shows a major improvement in information security. Canada may no longer be a global leader in leaky deals.
The Financial Times noted the interesting trading activity in Uranium One that began in December, well ahead of Monday's takeover announcement, and the ROB's Martin Mittelstaedt reported a host of similarly well-timed buys in Canada ahead of deals in 2010. In all these cases, stocks moved up ahead of the public announcement of mergers and acquisitions, suggesting that information about the deals was being leaked.
That does not appear to be the case right now. The biggest continuing saga in Canadian M&A is the First Quantum hostile bid for Inmet Mining, which was announced publicly on Nov. 28, 2012. There was no spike in trading volume or stock price ahead of the announcement even though the bid was presented to Inmet management on Nov. 25. The call option market for Inmet was similarly quiescent.
Other major deals announced Monday include the sale of Harry Winston Inc.'s jewellery assets to Switzerland's Swatch AG and the Alamos Gold acquisition of Aurizon Mines Ltd. Again, we found no evidence in stock or option prices that the deal had been leaked.
The highly public insider trading scandals in the U.S. may be responsible for the decline of obvious insider trading here, but regardless of the reason, the trend is encouraging for Canadians concerned about an equal playing field for all investors.