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A roundup of some of the North American equities making moves in both directions today

On the rise

Tesla Inc. (TSLA-Q) added about US$50-billion to its market value as the electric car-maker’s shares surged on Monday, after it posted record deliveries on strong demand in China that helped it offset the impact of a global shortage in auto parts.

The company said on Friday it was encouraged by the strong reception of its Model Y crossover in China and it was quickly progressing to full production capacity.

Analysts remained hopeful as despite a global chip shortage that has slammed the entire auto sector, various supply chain issues and rising competition, Tesla still managed to produce roughly the same amount of vehicles in the first quarter as in the fourth quarter.

At least three brokerages raised their price targets on Tesla’s stock. Brokerage Wedbush was the most aggressive, increasing it by $50 to $1,000, much higher than the median price target of $712.50, as per Refinitiv data. Wedbush also raised its rating to “outperform” from “neutral.”

“Tesla is executing impeccably. I am not surprised by the strong deliveries,” said Roth Capital Partners analyst Craig Irwin, even as he added that the stock is “egregiously overvalued.”

See also: Monday’s analyst upgrades and downgrades

Barrick Gold Corp. (ABX-T) saw gains in the wake of Papua New Guinea Prime Minister James Marape announcing an imminent agreement to reopen the disputed Porgera gold mine a year after it was shut.

The world’s second-largest gold producer lost a key court challenge last year over rights to the mine.

In April last year, Marape refused to extend Barrick’s lease for the requested 20 years, citing environmental and social issues, and instead gave it to a state-owned mining company, Kumul Minerals Holdings Ltd.

However, Marape said in October that Barrick Niugini Limited (BNL) was set to remain operator of the Porgera gold mine following talks with Barrick CEO Mark Bristow.

BNL is a joint venture company in which Barrick and Zijin Mining Group each own 50 per cent.

The Porgera joint venture is an open pit and underground gold mine in the Enga province of Papua New Guinea, about 600 kilometers north-west of Port Moresby.

Autocanada Inc. (ACQ-T) jumped following the premarket announcement of acquisition of PG Klassic Autobody in Prince George, B.C.

Acumen Capital analyst Trevor Reynolds said: “The acquisition represents a continuation of the strategy to develop its national collision center to match ACQ’s dealership network.”

Aphria Inc. (APHA-T) was narrowly higher after announcing two independent proxy advisory firms have recommended its shareholders approval of its merger with Tilray Inc. (TLRY-Q).

Institutional Shareholder Services Inc. and Glass Lewis and Co., LLC say they support the deal announced in December, that will see Aphria receive 0.8381 shares of Tilray for each Aphria common share.

ISS says the deal appears sound because it will deliver $100 million in pre-tax cost synergies and will make the combined company the world’s largest cannabis businesses based on pro-forma revenues.

Glass Lewis says it conducted an independent review of the transaction and believes the deal was structured fairly and reasonably and is favourable to Aphria shareholders.

Aphria will host a special meeting for shareholders about the transaction next Wednesday, following a Monday proxy voting deadline.

Aphria’s board of directors has unanimously favoured the deal and recommended shareholders vote in favour of it.

See also: Aphria, Tilray merge with eye on European, U.S. markets

Great Canadian Gaming Corp. (GC-T) was up after its proposed acquisition by a fund affiliated with Apollo Global Management Inc. moved a step closer to completion following approval by Investment Canada.

The U.S. buyer received approval under the Investment Canada Act for the investment fund’s $45 per share takeover offer.

That follows approvals in December from the Supreme Court of British Columbia and securityholders, as well as clearance under the Competition Act.

Certain other closing conditions remain, with the transaction expected to close in the second quarter of 2021.

Just three of the company’s 26 casinos remain open after Ontario operations at the Elements Casino Grand River and Shorelines Casino Belleville were suspended as of April 2 following government mandates to address the spread of COVID-19.

Two casinos in Nova Scotia and one in New Brunswick remain open with restrictions.

About 79 per cent of shareholders voted in favour of the deal on Dec. 23 after the investment fund sweetened its earlier offer by more than 15 per cent.

Alphabet Inc.’s Google (GOOG-Q, GOOGL-Q) was up after the U.S. Supreme Court handed it a major victory on Monday, ruling that its use of Oracle Corp.’s (ORCL-N) software code to build the Android operating system that runs most of the world’s smartphones did not violate federal copyright law.

In a 6-2 decision, the justices overturned a lower court’s ruling that found Google’s inclusion of Oracle’s software code in Android did not constitute a fair use under U.S. copyright law.

Justice Stephen Breyer, writing for the majority, said that allowing Oracle to enforce a copyright on its code would harm the public by making it a “lock limiting the future creativity of new programs. Oracle alone would hold the key.”

Oracle and Google, two California-based technology giants with combined annual revenues of more than $175 billion, have been feuding since Oracle sued for copyright infringement in 2010 in San Francisco federal court.

On the decline

Shares of Transat AT Inc. (TRZ-T) plummeted in the wake of Friday’s announcement that it has agreed to terminate its deal to be acquired by Air Canada (AC-T).

The end of the proposed merger of Canada’s biggest and third-biggest airlines throws the future of the money-losing Montreal-based Transat into question.

The deal, announced in June, 2019, was slashed in price from $720-million in October, 2020, owing to the collapse in demand for air travel during the pandemic.

The deal received Canadian approval in February but was under examination by the European Commission, because both have large presences there. In a statement on Friday, Air Canada said it became apparent the EC would not approve the deal even after the airline offered concessions.

“After careful consideration, Air Canada has concluded that providing additional, onerous remedies, which may still not secure an EC approval, would significantly compromise Air Canada’s ability to compete internationally, negatively impacting customers, other stakeholders and future prospects as it recovers and rebuilds from the impact of the COVID-19 pandemic,” the company said in a press release.

- Eric Atkins

Oil and gas company Whitecap Resources Inc. (WCP-T) dipped after it said on Monday it will acquire Kicking Horse Oil & Gas Ltd, a privately-held indirect subsidiary of Quantum Energy Partners, for $300-million in a stock-and-cash deal.

Canada’s oil and gas sector had a record start to 2021 in terms of mergers and acquisitions as companies took advantage of improved expectations of oil prices amid the pandemic recovery, and many industry participants expect the trend to continue.

Whitecap’s indirect acquisition of Kicking Horse consists of 34.5 million Whitecap common shares and $56-million in cash, along with the assumption of net debt estimated at $54-million as of Feb. 28.

The Kicking Horse assets are positioned in the liquids-rich portion of the Alberta Montney. Whitecap says the deal complements its existing Montney position at Karr and has significant offsetting activity.

Kicking Horse’s current production is about 8,000 barrels of oil equivalent per day (boepd) and is expected to increase to and maintained at 18,000–19,000 boepd over the next 12–15 months with the drilling of eight to ten wells per year.

See also: Mergers and acquisitions activity has exploded. Here’s why – and the reasons it will continue for the foreseeable future

GameStop Corp. (GME-N) shares slid after the video game retailer said it may sell up to US$1-billion worth of stock as it takes advantage of a dizzying rally in its shares this year on the back of a Reddit-driven retail trading frenzy.

The company said it would sell up to 3.5 million shares and use the proceeds to speed up the shift in its business model to e-commerce in an overhaul being led by top shareholder and board member Ryan Cohen.

At Thursday’s closing price of US$191.45, the “at-the-market” sale could fetch GameStop up to US$670-million. The company, however, is not obligated to sell shares at that value since at-the-market programs allow companies to sell stock over a prolonged period of time.

GameStop’s stock has gained more than 900 per cent so far this year, giving the company a valuation of as much as US$34-billion at one point as retail traders bet against Wall Street hedge funds that had shorted its shares.

Inter Pipeline Ltd. (IPL-T) finished flat in the wake of announcing it will receive $408-million under the Alberta Petrochemicals Incentive Program. The grant is set to support of its Heartland Petrochemical Complex, which is scheduled to be operational in early 2022.

In a research note, ATB Capital Markets analyst Nate Heywood said: “Overall, we view the announcement as positive given the $208-million net benefit from the APIP grant and resignation of PDP credits. The APIP program has been awarded to IPL in order to support development of the $4-billion Heartland Petrochemical Complex (HPC), which is expected to offer economic benefits to Alberta, creating jobs and incremental tax revenue. Given the ongoing strategic review and formal bid from Brookfield Infrastructure Partners (BIPC-T), we continue to view the name as likely to trade on transaction related news and though we view today’s development positively, it is unlikely to materially impact IPL’s trading price.”

See also: Brookfield under pressure to hike takeover bid after Inter Pipeline lands $408-million grant for petrochemical complex

Shares of Pioneer Natural Resources Co. (PXD-N) declined as the U.S. oil producer’s US$6.4-billion acquisition of rival DoublePoint Energy months after a large deal took investors by surprise, with the sector still recovering from last year’s crash.

Pioneer’s fourth multi-billion shale deal this year comes as investors in the shale patch have called on producers to focus on cash flow and shareholder returns, rather than spending to grow, as demand remains low due to the COVID-19 pandemic.

In January, Pioneer closed its US$4.5-billion, all-stock purchase of Parsley Energy, giving it one of the largest positions in the Permian Basin, the top U.S. shale field.

RBC Capital Markets said it was surprised Pioneer made such a large acquisition after Parsley Energy and that the rationale seemed to be part opportunistic and part defensive.

With files from staff and wires

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