Canadian Stocks Rise as Cnooc Wins U.S. Approval for Nexen DealEric Lam
Canadian stocks rose as energy companies advanced after Cnooc Ltd. won approval to acquire the U.S. assets of Nexen Inc. and crude oil climbed to the highest price in more than a week.
Nexen gained 2 percent as Cnooc cleared the last regulatory hurdle for the Chinese company’s $15.1 billion acquisition of the energy producer. Canadian Natural Resources Ltd. rose 3.4 percent as crude gained 0.5 percent. Gran Tierra Energy Inc. jumped 7.4 percent after the company announced an oil discovery in Peru. Agrium Inc. lost 2 percent after appointing two directors to its board as talks to avert a proxy fight with activist investor Jana Partners LLC fell apart.
The Standard & Poor’s/TSX Composite Index rose 40.87 points, or 0.3 percent, to 12,789.02 in Toronto. The S&P/TSX has risen 3.2 percent over the past 12 months, underperforming every developed market in the world except Italy and Spain, according to data compiled by Bloomberg.
“Giving the TSX a bit of a lift today is the final approval for the Nexen-Cnooc deal,” said Michael O’Brien, director and fund manager with TD Asset Management Inc. in Toronto. He manages about C$3 billion ($3 billion). “It’s a bit of a relief that we have a firm date now.”
Energy stocks contributed most to gains in the S&P/TSX as eight of 10 industries advanced. Trading volume was 2.6 percent above the 30-day average at this time of the day.
Nexen, based in Calgary, climbed 55 Canadian cents to C$27.48. The Committee on Foreign Investment in the U.S. approved the deal between Nexen and Cnooc, China’s biggest oil and natural gas producer. The acquisition is expected to close the week of Feb. 25, Nexen said in a statement today. Nexen owns oil and gas drilling and platforms in the Gulf of Mexico, accounting for about 8 percent of its output.
Canadian Natural Resources gained C$1.04 to C$31.55 to pace gains among energy companies.
Crude for March delivery added 48 cents to settle at $97.51 a barrel in New York, the highest level since Feb. 1. The Organization of Petroleum Exporting Countries boosted a demand forecast for its crude, saying it will have to provide 29.8 million barrels a day in 2013, a 0.3 percent increase from a January estimate.
Gran Tierra rose 41 cents to C$5.95 after finding crude oil in the Bretana Norte well of Block 95 in the Peruvian Amazon jungle. Gran Tierra is testing the reservoir’s productivity and expects results in late February.
Toromont Industries Ltd. advanced 2.8 percent to C$22.90 after Ben Cherniavsky, analyst with Raymond James Ltd., raised his rating for the stock to outperform from market perform while increasing his price target to C$25.75 from C$21. The equipment dealer reported fourth-quarter adjusted earnings of 59 cents a share, compared with analysts’ consensus estimate of 45 cents.
Agrium fell C$2.29 to C$112.71. The largest agricultural retailer in North America appointed Mayo Schmidt, former chief executive officer of Canadian grain handler Viterra Inc., and David Everitt, a retired Deere & Co. executive, at the end of three days of talks with Jana that failed to reach a compromise.
Jana, the New York-based hedge fund, is Agrium’s largest shareholder with a 6.2 percent stake and has sought to replace five of Agrium’s 11 directors. The activist investor has said the current board lacks experience in farm-product retailing and has also proposed spinning off Agrium’s retail network to boost profitability.
TransCanada Corp. lost 1.4 percent to C$47.56 after posting fourth-quarter profit short of analysts’ expectations. The Calgary-based company, which transports 20 percent of North America’s natural gas, said profit fell as shipments of the fuel on some pipelines declined.
Alacer Gold Corp. slumped 8.4 percent to C$4.16, its lowest since May 2010, after the company that explores for gold in Australia and Turkey had its rating reduced to underweight from neutral at JPMorgan by analyst Joseph Kim.