A roundup of some of the North American equities making moves in both directions today
On the rise
Shaw Communications Inc. (SJR-B-T) soared on Monday after Rogers Communications Inc. (RCI.B-T) revealed plans to acquire its Western Canadian rival for $20.4-billion in a deal that unites two family dynasties in a nationwide battle for customers against BCE Inc. and Telus Corp.
Shaw chief executive Brad Shaw decided his Calgary-based company could no longer go it alone in an increasingly competitive telecom market and needed to combine forces with Rogers on a planned $6.5-billion network expansion in Western Canada.
“5G and our urban and rural networks are critical to our customers, and we can move more quickly together than either of us could on our own,” he said in an interview with The Globe and Mail.
- Andrew Willis
See also: Sale of telecom empire has ‘generational impact’ on Shaw family
Village Farms International Inc. (VFF-T) rose after announcing before the bell it will be added to the S&P/TSX Composite Index in the Consumer Staples sector prior to the start of trading on March 22.
“Our addition to the benchmark stock index for the TSX, on which Village Farms has been listed since 2006, is another proud milestone for Village Farms, and a reflection of the significant value we are creating for shareholders as we leverage our decades of experience as one of North America’s largest vertically integrated controlled environment produce suppliers for the high-growth cannabis opportunity in Canada, and internationally, including the U.S. and other large potential markets,” said CEO Michael DeGiglio.
Canaccord Genuity Group Inc. (CF-T) was up after unveiling a $367-million takeover offer for RF Capital Group Inc. after being rebuffed by its rival’s board and largest shareholder, Winnipeg’s Richardson family.
In a bid to unite two of the country’s largest independent wealth management platforms, Toronto-based Canaccord sent RF Capital’s board a letter last Tuesday offering $2.30 a share for the company, a price that’s 31 per cent above where its shares were trading. The following day, the board at RF Capital turned down the bid, without offering reasons, according to a press release from Canaccord on Monday.
RF Capital operates under the Richardson Wealth banner, with $30-billion in client assets under management and 19 offices across Canada. The Richardson family’s private holding company holds 44 per cent of Toronto-based RF Capital, while the remainder is owned by the company’s investment executives, current and former employees, and public shareholders.
- Andrew Willis
CI Financial Corp. (CIX-T) was higher after announcing the US$4.7-billion acquisition of investment advisor Brightworth LLC of Atlanta.
The Toronto-based firm said the deal and other recently announced transactions are expected to more than double CI’s U.S. assets to approximately US$55-billion, “continuing CI’s rapid growth in wealth management.”
Southwest Airlines Co. (LUV-N) and JetBlue Airways Corp. (JBLU-Q) gained after pointing to a steady rise in leisure bookings as signs of a slowing pandemic due to vaccine rollouts drove more people to go on vacations or visit their friends and relatives.
Southwest also forecast lower cash burn in the first quarter on Monday and said operating revenue for March and April was expected to improve as a rise in leisure bookings countered a lag in business travel.
The U.S. airline expects average core cash burn to be about US$14-million per day in the first quarter, compared with its previous forecast of about US$15-million.
“The company has continued to experience an improvement in leisure passenger bookings with beach and other nature-inspired destinations continuing to outperform other regions,” Southwest said in a statement.
Southwest had cash and short-term investments of about US$14.4-billion as of March 11.
JetBlue also forecast a slowing pace in its first-quarter revenue drop, projecting a decline of between 61 per cent and 64 per cent, compared with the same period in 2019. It had previously forecast a 65-per-cent to 70-per-cent fall in revenue.
Extended Stay America Inc. (STAY-Q) jumped after Blackstone Group (BX-N) and Starwood Capital Group said they have agreed to buy hotel operator for US$6-billion.
As bookings plunged across the U.S. hotel industry over the last year due to the COVID-19 pandemic, Extended Stay, which specializes in economy temporary housing for healthcare professionals, proved stronger than its peers.
Private equity company Blackstone’s and investment firm Starwood’s cash offer of US$19.50 per share represents a premium of 15.1 per cent to Extended Stay’s share closing price on Friday.
“Extended Stay has demonstrated resilience over the past year despite persistent challenges due to government lockdowns and travel restrictions,” said Barry Sternlicht, chief executive officer of Starwood Capital.
“We are excited about the company’s growth opportunity as restrictions ease.”
Extended Stay’s stock has more than doubled in the past 12 months, outperforming its larger peers Marriott and Hilton which gained between 60 per cent and 65 per cent.
On the decline
Shawcor Ltd. (SCL-T) rose in the wake of the premarket announcement that its pipe coating division has secured a firm contract to provide a wet insulation coating system for a Development Project located in the North Sea.
The value of the award is in the range of $40-$45 million, pending final investment decision which is expected to occur in the third quarter of 2021.
With files from staff and wires