Canadian stocks rose, after the benchmark index snapped a four-day rally yesterday, as Valeant Pharmaceuticals International Inc. jumped after offering to buy Allergan Inc. for $45.7 billion.
Valeant rose 7.7 percent in Toronto trading after offering to merge with Allergan, the maker of the Botox wrinkle treatment. Rogers Communications Inc., Canada’s biggest wireless operator, fell 3.6 percent after missing analyst estimates for first-quarter earnings and subscriber numbers.
The Standard & Poor’s/TSX Index rose 62.29 points, or 0.4 percent, to 14,555.97 at 4 p.m. in Toronto. The gauge has risen 6.9 percent this year.
Valeant’s valuation will jump a lot higher if the deal is finalized, said Brian Huen, managing partner at Red Sky Capital Management in Toronto. “There’s still a lot of timeline uncertainties, regulatory uncertainties and whether or not they can get the deal across the finish line, that’s holding the stock back,” he said by phone. Huen helps manage about C$225 million ($203 million).
Valeant rose 7.7 percent to C$149.38 on the Toronto exchange. The Laval, Quebec-based company will pay Allergan investors $48.30 in cash and 0.83 percent in Valeant stock for each share they own, Valeant said in a statement yesterday. Pershing Square Capital Management LP, the fund run by Bill Ackman and Allergan’s largest shareholder with a 9.7 percent stake, supports the offer, Valeant said.
Mining companies rose as Barrick Gold Corp. rebounded 1.8 percent to C$19.37 after falling 3.9 percent yesterday as talks for a merger with Newmont Mining Corp. were said to break down.
TransCanada Corp. gained 1.3 percent to C$50.04. The builder of the proposed Keystone XL pipeline fell 3.7 percent yesterday after the timeline for the project’s approval was pushed back.
“Yesterday’s news certainly got people nervous and people are going to be reluctant to get back in the name until more clarity can be provided,” said Huen.
Rogers fell 3.6 percent to C$42.71 as subscriber growth missed analyst estimates and average revenue per customer fell 5 percent from the same period last year, according to a statement.
Sandstorm Gold Ltd. fell 3.5 percent to C$5.78 after saying it would buy Sandstorm Metals & Energy Ltd. at a 43 percent premium to the company’s April 21 closing price. National Bank Financial cut its rating on the stock from the equivalent of a buy to the equivalent of a hold.
Canadian Pacific Railway Ltd. rose 5.3 percent to C$172.62 after the company reported first-quarter profit that beat analysts estimates. The company has been reducing expenses by firing employees and cutting benefits.
Points International Ltd. rose 6.4 percent to C$27 after buying Accruity, which owns travel booking website PointsHound.com.
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