TSX up as BCE to take Bell Aliant private
A multi-billion-dollar deal in the telecom sector and a potential purchase in the Canadian oil patch helped push the Toronto stock market higher Wednesday.
The S&P/TSX composite index gained 79.25 points to 15,394.38 — the latest in a string of record-high closes.
BCE Inc. is moving to privatize affiliate Bell Aliant in a deal worth roughly $3.95-billion. The telecom giant already controls 44% of the regional telecommunications company.
Bell Aliant shareholders will receive cash and BCE shares for a combined value of $31 per share. BCE shares were up 81¢ to $49.82, while Bell Aliant shot up $3.34 to $31.53.
BCE said it plans a capital investment of $2.1-billion across Atlantic Canada over the next five years to continue the rollout of broadband wireline and wireless for consumers and business users.
“This acquisition is the next logical step and BCE’s large national buildup in acquiring all of this subsidiary will simplify their corporate structure, eliminate costs and increase operating efficiency throughout BCE,” said Kash Pashootan, portfolio manager at First Avenue Advisory in Ottawa.
Also, Talisman Energy acknowledged that it has been approached by Spanish energy giant Repsol. Talisman added that “there is no assurance that any transaction will be agreed.” Talisman shares soared $1.40 or 13.25% to $11.97.
The Canadian dollar was up 0.07 of a cent to US93.21¢.
In New York, Boeing helped depress the Dow industrials as the aerospace giant reported a profit of US$1.65-billion, or $2.24 a share, beating estimates of $2.01 a share. However, revenue of US $22.05-billion narrowly missed expectations of $22.23-billion and its shares slipped 2.34% to $126.71, even as Boeing boosted its earnings guidance for the year. The Dow lost 26.91 points to 17,086.63. A well-received report from Apple helped push the Nasdaq to its highest level since September 2000 — up 17.68 points to 4,473.7.
Apple Inc. reported a 12% increase in its quarterly profit, exceeding analyst estimates as iPhone shipments rose 13% compared with a year earlier and its shares gained 2.6% to US$97.19.
After the close, Facebook posted earnings per share ex-items of 42¢, a dime better than estimates. Revenue of $2.91-billion beat estimates of $2.81. However, its shares were off 0.6% in after-hours trading.
The S&P 500 index added 3.48 points to a fresh record close of 1,987.01.
Traders also kept an eye on simmering tensions between Russia and the West as Ukraine’s Defence Ministry said two Ukrainian military fighter jets had been shot down in the eastern part of the country.
There was relief on markets Tuesday after the European Union stopped well short of moving to jump to so-called Phase 3 sanctions against Moscow for its support of Ukrainian rebels.
On the TSX, the metals and mining sector was ahead 1.44% with September copper unchanged at US$3.21 a pound.
The energy sector climbed 1.24%, while crude oil in New York rose 63¢ to US$103.12 a barrel. The gold sector slipped about 0.52% as bullion faded $1.60 to US$1,304.50 an ounce.