- CEO Pearson to step down; investor Bill Ackman joins board
- Bankers Petroleum soars most since 2004 after agreeing to deal
Canadian stocks advanced, rebounding from a loss on Friday, as shares of Valeant Pharmaceuticals International Inc. jumped after saying Chief Executive Officer Michael Pearson will step down amid a shakeup of the embattled drugmaker’s board and management.
The Standard & Poor’s/TSX Composite Index climbed 0.5 percent to 13,561.09 at 4 p.m. in Toronto, rebounding from a loss last week. The Canadian benchmark equity gauge is still up 4.2 percent this year.
Valeant added 8.5 percent, snapping a five-day slide last week that included a record 51 percent drop on March 15. Valeant said in a statement on Monday that Pearson will continue to serve as CEO until a successor is found. Meanwhile Bill Ackman, the billionaire investor whose Pershing Square Capital Management LP is one of Valeant’s biggest investors, will join the company board. The company also said it’s asked former Chief Financial Officer Howard Schiller, who replaced Pearson during a two-month medical leave, to tender his resignation due to “improper conduct” but has not yet done so.
Briefly the largest company in Canada by market capitalization last year, Valeant has lost almost 90 percent of its value from an August peak after the company announced a weaker 2016 outlook, leading analysts to slash their price targets. It also remains under investigation by U.S. lawmakers and regulators over its business practices.
The S&P/TSX has jumped about 15 percent after reaching a two-and-a-half year low in January, making it one of the best-performing developed markets in the world this year and posting returns ahead of the U.S., Germany and U.K.
The rebound has been led by an advance in resource stocks, including gold mining companies, energy and base metals producers as commodity prices stabilized amid speculation OPEC producers will freeze output and investors seeking havens flocking to gold. The S&P/TSX now trades at 21.8 times earnings, about 17 percent more expensive than the valuation of the U.S. equity benchmark, the Standard & Poor’s 500 Index, data compiled by Bloomberg show.
Bankers Petroleum Ltd. soared 54 percent, the most in more than a decade, after agreeing to sell itself to Geo-Jade Petroleum Corp. in a C$575 million deal. The all-cash offer, at C$2.20 a share, is almost double the company’s closing price of C$1.11 on Friday.