A roundup of some of the North American equities making moves in both directions today
On the rise
Osisko Mining Inc. (OSK-T) was higher on Tuesday after it announced before the bell it has signed an agreement for a private placement of $15-million in a convertible senior unsecured debenture with Northern Star Resources Limited.
Osisko and Northern Star have also agreed to negotiate, on an exclusive basis, the terms of an earn-in and joint-venture on up to a 50-per-cent interest in Osisko’s Windfall Project.
The company said the net proceeds of the debenture will be used for the advancement of its Windfall Project and for general corporate purposes.
PrairieSky Royalty Ltd. (PSK-T) increased following the late Monday announcement of a definitive agreement with Heritage Royalty to acquire over 1.9 million acres of royalty lands throughout Alberta, Saskatchewan and Manitoba, including over 1.7 million net acres of fee simple mineral title lands, and extensive seismic assets that are complementary to the lands for total cash consideration of $728-million.
On the decline
Bank of Nova Scotia (BNS-T) was lower on Tuesday after it kicked off fourth-quarter reporting with better-than-expected profit, as strength in its Canadian and wealth management units and lower provisions in its international business offset weaker capital markets performance and continued margin pressure.
Canada’s third-largest lender also announced a dividend of $1 a share, up from the 90 cents it has paid in the last eight quarters, the first major bank to do so following the lifting of restrictions by the country’s financial regulator earlier this month.
Canadian banks and investors have been hoping for an improvement in non-mortgage lending, as earnings beats over past quarters have been driven by the release of loan-loss reserves set aside last year, and home loans.
Scotiabank took provisions of $168-million during the quarter, down from $1.1-billion a year ago. Excluding the impact of provisions and taxes, the bank posted adjusted profit of $3.6-billion, up 4 per cent from a year ago.
While net interest income in Canada did rise 7 per cent due to stronger lending, it was tempered by a decline in margins, as loan growth remained skewed to residential mortgages, which have lower rates.
Margins also fell in the international business, despite policy rate hikes in some of the countries the bank does business in, also due to the loan mix.
Higher fees lifted earnings in both Canadian banking and wealth management, helping offset weakness in its capital markets unit.
Net income excluding one-off items rose to $2.72-billion, or $2.10, in the three months ended Oct. 31, compared with $1.9-billion, or $1.45, a year earlier. Analysts had expected $1.90 a share, according to IBES data from Refinitiv.
West Fraser Timber Co Ltd. (WFG-T) was lower after it said on Tuesday severe weather and flooding in British Columbia has caused transportation disruptions to rail and truck routes, reducing its weekly lumber shipments by 25 per cent to 30 per cent.
West Fraser also said pulp shipments to the port of Vancouver, from where a majority of the company’s export pulp is shipped, have averaged less than 20 per cent of normal volumes.
The company added it had reduced operating schedules at multiple western Canadian locations and will continue to make necessary adjustments to manage inventory levels, raw material supplies, and its integrated fiber supply chain.
Regeneron Pharmaceuticals Inc. (REGN-Q) was down after saying its COVID-19 antibody treatment and other similar drugs could be less effective against the new Omicron coronavirus variant.
The drugmaker said further analyzes are ongoing to confirm and quantify this potential impact using the actual Omicron variant sequence.
Global markets fell on Tuesday following comments from Moderna Inc.’s (MRNA-Q) chief executive officer, who said COVID-19 vaccines are unlikely to be as effective against Omicron as they have been previously.
Regeneron said analysis shows the individual mutations present in Omicron indicate “there may be reduced neutralization activity of both vaccine-induced and monoclonal antibody conveyed immunity.”
The analysis included Regeneron’s COVID-19 antibody cocktail REGEN-COV, according to the company.
Rivals Eli Lilly and Co and Vir Biotechnology Inc , who have also developed COVID-19 antibody drugs, did not immediately respond to Reuters requests for comment.
The World Health Organization and scientists have said it could take weeks to understand whether Omicron is likely to cause severe illness or escape protection against immunity induced by vaccines.
Vaccine makers are already preparing for a situation where their current vaccines are less effective against the new variant, with several companies announcing on Monday that they had begun work on vaccines tailored for Omicron.
Lululemon Athletica Inc. (LULU-Q) declined in the wake of following through on its threat to sue Peloton Interactive Inc. (PTON-Q) over the “copycat products” in the exercise bike company’s new clothing line.
The Vancouver-based athletic apparel maker sued Peloton in Los Angeles federal court, seeking triple damages for its rival’s alleged “willful” infringement of six design patents.
Lululemon filed its lawsuit five days after Peloton brought its own case in Manhattan federal court, seeking a declaration that Lululemon’s claims had no merit.
Peloton and its lawyer did not immediately respond to requests for comment.
The dispute arose from Peloton’s launch in September of a private-label apparel brand, following the end of the companies’ five-year co-branding relationship.
Lululemon said five Peloton women’s bra and legging products - Strappy Bra, High Neck Bra, Cadent Peak Bra, Cadent Laser Dot Bra and Cadent Laser Dot Leggings - infringed its patents.
It also said another Peloton product, One Lux Tight, is a knockoff of its Align pants, one of its all-time best sellers.
Peloton “intended to closely copy Lululemon’s proprietary designs and pass off its goods as Lululemon’s high quality products to misappropriate the immense goodwill that Lululemon has spent enormous time, effort, and expense to cultivate,” Lululemon said in its complaint.
Shares of Florida-based NextEra Energy Inc. (NEE-N) slid with the premarket announcement of a deal to sell a 50-per-cent non-controlling interest in an approximately 2,520 megawatt (MW) portfolio of long-term contracted renewables assets to the Ontario Teachers’ Pension Plan Board for US$849-million.
The remaining 50% interest in the portfolio is under an agreement to be sold by subsidiary NextEra Energy Resources to NextEra Energy Partners LP (NEP-N).
It says sale proceeds are “expected to be redeployed into new wind, solar and battery storage growth opportunities, including NextEra Energy Resources’ more than 18,000-MW renewables and storage backlog.”
The pension fund manager has also committed to buy at least a 25 per cent interest in a US$824-million convertible equity portfolio financing announced by NextEra Energy in October.
Chris Ireland, managing director, greenfield and renewables at Ontario Teachers’, says the investment marks the beginning of what is expected to be a long-term partnership with the company.
The deal is expected to close later this year or in early 2022, subject to customary closing conditions and regulatory approvals.
Facebook owner Meta (FB-Q) lost ground after being told by the UK competition watchdog to sell popular animated images platform Giphy in Britain’s first such move against so-called Big Tech in its efforts to bolster regulation of the sector.
The Competition and Markets Authority (CMA) said it had found that last year’s acquisition of Giphy would reduce competition between social media platforms and in display advertising.
Facebook, which was recently rebranded as Meta Platforms, said it could appeal against the CMA’s decision. It has four weeks to appeal.
“The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market,” said Stuart McIntosh, chair of the independent investigation on Facebook-Giphy for the CMA.
“By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising.”
Facebook said it disagreed with the decision.
“We are reviewing the decision and considering all options, including appeal,” a Meta spokesperson said in a statement.
The CMA in October fined the company a record US$70-million for breaching an order imposed during its investigation into the acquisition, having said in August that it may need Facebook to sell Giphy.
Facebook bought Giphy, a website for making and sharing animated images, or GIFs, for a reported US$400-million in May 2020 to integrate the operation with its Instagram photo-sharing app. It has defended the deal to the CMA.
With files from Brenda Bouw, staff and wires
David Leeder