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M&A Stocks Lift TSX Wednesday Morning - Canadian Commentary

Toronto stocks were little changed Wednesday morning amid faltering commodities as bad loan problems at Spanish banks rekindled concerns over the debt situation in the region. Meanwhile, traders positively reacted to a batch of major acquisition deal from Canadian companies.

While Alimentation Couche-Tard announced plans to acquire Statoil Fuel & Retail, Norway to spread wings in Europe, SXC Health Solutions said it would acquire Catalyst Health Solutions in a $4.4 billion deal.

The S&P/TSX Composite Index edged up 11.05 points or 0.09 percent to 12.147.99, a day after snapping its two-session losing streak.

Convenience stores operator Alimentation Couche-Tard (ATD_A.TO) gained nearly 15 percent after announcing that it would acquire Statoil Fuel & Retail ASA for NOK 53 per share cash, valuing the latter at $2.8 billion. The offer represents a premium of 52.5 percent to the Tuesday's closing price of the Statoil Fuel & Retail shares.

Pharmacy benefit management services provider SXC Health Solutions (SXC.TO) rose 8 percent after it said it would acquire Catalyst Health Solutions Inc. (CHSI) in a cash and stock transaction valued at about $4.4 billion. Catalyst shareholders would receive $28.00 cash and 0.6606 SXC shares for each Catalyst share, impling a purchase price of $81.02 per Catalyst share and a premium of nearly 28 percent based on the closing stock prices of SXC and Catalyst on April 17, 2012.

Base-metals miner Ivanhoe Mines (IVN.TO) surged over 11 percent after announcing that it would proceed with a rights offering to holders of its common shares to raise up to approximately $1.8 billion in gross proceeds as part of a memorandum of agreement with majority shareholder Rio Tinto.

Financial stocks were trading marginally higher, with TD Bank (TD.TO), Scotiabank (BNS.TO) and National Bank (NA.TO) adding around 1 percent each.

Food and pharmaceutical company METRO Inc. (MRU.TO) gathered 1 percent after posting second-quarter net earnings of C$96.1 million or C$0.94 per share, higher than last year's C$85.7 million or C$0.82 per share.

Latest data from the EIA revealed that US crude oil inventories jumped 3.90 million barrels, while gasoline stocks shed 3.70 million barrels in the weekended April 13. Analysts were expecting crude oil inventories to add 400,000 barrels and gasoline stocks to move up by 140,000 barrels last week. Crude for May eased $0.63 to $103.57 a barrel.

In the oil patch, ARC Resources (ARX.TO) lost over 3 percent. Niko Resources (NKO.TO) and Vermilion Energy (VET.TO) were down around 1 percent each

The price of gold was lingering below the $1,650-mark Wednesday morning amid a generally steady U.S. dollar. Gold for June delivery lost $5.20 to $1,645.90 an ounce.

Among gold plays, Royal Gold (RGL.TO), Goldcorp. (G.TO) and Agnico-Eagle Mines (AEM.TO) were down around 1 percent each.

In economic news, the euro zone current account unexpectedly logged a seasonally adjusted deficit of EUR 1.3 billion in February, the European Central Bank said. Economists were expecting the surplus to fall to EUR 2 billion from EUR 3.7 billion surplus seen in January.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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