Stock news for investors: Spinoffs, acquisitions, and market moves
Canada Packers starts trading, TMX Group acquires Verity, and Algoma reports Q3 loss—plus more Canadian stock market updates.
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Canada Packers starts trading, TMX Group acquires Verity, and Algoma reports Q3 loss—plus more Canadian stock market updates.
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Maple Leaf Foods Inc. (TSX:MFI) says it has completed the spinoff of its pork operations into Canada Packers Inc. Common shares of Canada Packers are expected to start trading on the Toronto Stock Exchange on Thursday under the symbol CPKR.
Maple Leaf Foods is keeping a 16 per cent stake in Canada Packers and the two companies have entered into an evergreen supply agreement. It will also be an anchor customer for Canada Packers which will supply pork for its prepared meats business.
Michael McCain, executive chair at both companies, says Maple Leaf Foods and Canada Packers are moving forward as independent entities, each with a clear investment profile and experienced teams. He says the McCain family and McCain Capital Inc. are fully committed to the future of both companies.
TMX Group (TSX:X) says it has acquired Verity, an investment research management system, data, and analytics provider. Financial terms of the agreement were not immediately available.
Verity has two core products. VerityRMS is a research management system, while VerityData offers enhanced data sets and insights primarily focused on public equity filings.
TMX Datalinx president Michelle Tran says the addition of Verity strengthens the company’s ability to serve a growing global client base.
TMX Group is the operator of the Toronto Stock Exchange and other markets.
MEG Energy Corp. (TSX:MEG) says a second major independent proxy advisory firm has recommended its shareholders back a takeover offer for the company by Cenovus Energy Inc. (TSX:CVE). The company says Glass, Lewis & Co. has issued a report recommending shareholders vote for the cash-and-stock offer by Cenovus over a rival all-stock offer by Strathcona Resources Ltd.
The report comes after proxy advisory firm Institutional Shareholder Services Inc. said last week that MEG shareholders should support the Cenovus bid.
The Cenovus offer must be approved by a two-thirds majority vote by MEG shareholders, expected to be held on Oct. 9. Strathcona (TSX:SCR) has said it intends to vote its 14.2 per cent interest in MEG against the deal.
Cenovus and MEG have side-by-side oilsands properties at Christina Lake, south of Fort McMurray, Alta., while Strathcona also has operations in the region.
Utility pole company Stella-Jones Inc. (TSX:SJ) has signed a deal to buy U.S.-based Brooks Manufacturing Co. for US$140 million.
Brooks is a maker of treated wood distribution crossarms and transmission framing components. It was founded in 1915 and operates a facility in Bellingham, Wash.
Stella-Jones chief executive Eric Vachon called the acquisition a natural fit. “The addition of Brooks bolsters Stella-Jones’ suite of solutions, enhancing its ability to meet the growing demand of utilities and unlock new growth opportunities,” Vachon said in a statement Tuesday. “The acquisition reflects our strategic focus and aligns with our vision to make Stella-Jones a partner of choice to our infrastructure customers.”
Brooks’ sales for 2024 totalled about US$84 million.
RBC Capital Markets analyst James McGarragle called the deal a “strategically positive move.” “It creates a valuable growth platform for Stella-Jones by diversifying its product offering and leveraging Brooks’ established brand and customer relationships,” McGarragle wrote in a note to clients. “Furthermore, the acquisition aligns with Stella-Jones’ long-term strategic objectives to expand beyond traditional product categories and accelerate growth in the infrastructure segment, positioning the company to capitalize on ongoing investments in utility modernization.”
The deal is subject to closing conditions, including U.S. regulatory approval, and is expected to occur by the end of the year. The deal for Brooks follows the acquisition by Stella-Jones of Locweld Inc., a designer and manufacturer of lattice transmission towers and steel poles, earlier this year.
Based in Candiac, Que., Locweld employs about 220 people and has customers in both Canada and the U.S. Stella-Jones is a supplier of treated wood and steel utility poles and steel lattice towers, as well as treated wood railway ties and timbers. It also manufactures and distributes treated residential lumber.
Algoma Steel Group Inc. (TSX:ASTL) says it expects to report an adjusted loss before deductions of between $80 million to $90 million in its third quarter results.
The Sault Ste. Marie-based steel producer says in its guidance for the quarter ending Sept. 30 that it expects steel shipments for the quarter to be between 415,000 and 420,000 net tons. For the same period last year, the company reported adjusted earnings before interest, taxes, depreciation, and amortization of $3.5 million, and shipped 520,443 net tons.
The company has been hit hard by U.S. tariffs that Algoma says has effectively closed the market, while global overproduction in the steel sector in recent years has also been weighing on the company.
Algoma announced Monday that it had secured $500 million in loans from the federal and provincial governments to help it navigate the trade war and reorient production to the Canadian market. The company also announced Wednesday that David Sgro has resigned from the board of directors for personal reasons.
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