Canadian Stocks Decline After Barrick Agrees to Buy Equinox

Canadian stocks fell for the first time in four days as Barrick Gold Corp. (ABX) slumped after agreeing to buy Equinox Minerals Ltd. (EQN) for C$7.32 billion ($7.67 billion).

Barrick, the world’s largest gold producer, dropped 6.7 percent after saying it would buy the company, which mines copper in Africa. Equinox surged 11 percent. Canadian Natural Resources Ltd. (CNQ), the country’s second-biggest energy company by market value, declined 1.3 percent as natural gas retreated.

The Standard & Poor’s/TSX Composite Index fell 64.7 points, or 0.5 percent, to 13,907.32. Toronto Stock Exchange trading volume of 304.5 million shares was the lowest since Jan. 17.

“It’s not a rock-bottom price,” Irwin Michael, a money manager at ABC Group of Funds in Toronto, which manages C$1 billion, said of the Equinox deal. “In skinny volume, you’re going to see heightened reactions to whatever goes on, positive or negative. You’re going to see exaggerated price trends, and that’s exactly what’s going on.”

The S&P/TSX rose 2 percent in the three days that ended April 21, the most in four weeks, as companies including Intel Corp. and General Electric Co. beat analysts’ earnings estimates and the U.S. dollar declined to a 32-month low against a basket of world currencies. The index gained 15 percent over the past year, behind only Germany’s DAX index and Norway’s OBX index among benchmark measures for developed-nation stocks.

If completed, Barrick’s purchase of Equinox would be the biggest acquisition of a Canadian mining company since Teck Resources Ltd. bought Fording Canadian Coal Trust for $11.3 billion in 2008, according to data compiled by Bloomberg.

Minmetals Bid

Minmetals Resources Ltd. (1208) of Hong Kong had made an unsolicited bid of C$7 a share for Equinox on April 3. Equinox itself had launched an unsolicited takeover offer for Lundin Mining Corp. (LUN) in February that Equinox valued at about C$4.8 billion. Equinox said today it will drop its bid for Lundin.

Barrick lost 6.7 percent, the most since December 2009, to C$49.50. Equinox jumped 11 percent to a record C$8.37, extending its monthly increase to 46 percent. Lundin increased 3.8 percent to C$8.30.

Most other S&P/TSX precious-metals producers fell. Agnico- Eagle lost 3.3 percent to C$62.86. Silver Wheaton Corp. (SLW), Canada’s fourth-biggest precious-metals company by market value, declined 3.1 percent to C$39.21. First Majestic Silver Corp., which operates in Mexico, slumped 4.8 percent to C$21.19.

Base-Metal Producers

Base-metal producers that, like Equinox, have operations in Africa rose. First Quantum Minerals Ltd. (FM), Canada’s second- largest publicly traded copper company, gained 5 percent to C$136.51. NGEx Resources Inc. (NGQ), which explores for copper and zinc in Eritrea, rallied 9.4 percent to C$3.25, the highest since 1998.

The S&P/TSX Energy Index retreated for the first time in four days as natural gas lost 0.5 percent amid forecasts for cooler weather in the southern U.S.

Canadian Natural decreased 1.3 percent to C$43.88. Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, slipped 0.7 percent to C$42.89.

Niko Resources Ltd. (NKO), which produces oil and gas in South Asia, fell 3.5 percent to C$83.55 after Melanie Love, an analyst at Canaccord Financial Inc., cut her rating on the shares to “hold” from “buy.” Love cited declining production as a reason for the downgrade in a note to clients.

To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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