Monday, August 14, 2006, 4:15 PM EDT (Thomson Financial Corporate
Services): As the Middle East began to observe a U.N.-brokered ceasefire
and the prices of oil and gold dropped after last week's frantic trading,
the metals-and-energy-weighted TSX suffered a daylong decline. Another
chapter of the mining merger epic closed, as Xstrata finally consumed
Falconbridge. MTS Media and Sleeman also settled on suitors, while NovaGold
rejected Barrick's bid. Finally, Neurochem received good clinical trial
news, which pushed healthcare into the black today.
* The S&P/TSX Stock Exchange Composite Index tumbled 94.74 points, or
0.79%.
* "When the Xstrata deal closes, the company that drew its name from a
Falconbridge Township nickel discovery [78 years ago] near Sudbury, Ont.,
will be little more than a memory" wrote the Canadian Press as the
Anglo-Swiss mining concern, with a final bid of C$63.25 per share in cash,
won the fight for Falconbridge. The Canadian company will lose most of its
executives and some of its foreign subsidiaries, while keeping most of its
nickel, copper, and zinc-related jobs in Canada for at least three years.
However, it will soon also lose its name, being folded into Toronto-based
Xstrata Canada.
* In telecom merger news, the Yellow Pages Group is buying MTS Media,
aka MTS Allstream, which publishes Manitoba's largest business directory,
for C$275 million in cash.
* Third-largest sudsmaker Sleeman Breweries has accepted the bid of
Sapporo Breweries to buy it for C$300 million or C$17.50 per share. The
Japanese beer baron, which beat out three other suitors and already pays
Sleeman to brew Sapporo brands in Canada and the U.S., will also assume its
C$108 million in debt.
* Alcan plans to invest US$1.8 billion to update and expand its
52-year-old aluminum smelter in Kitimat, British Columbia. The move, the
single largest private sector investment ever in B.C., will raise
production by more than 60% from 245,000 tonnes per year to 400,000 tonnes
by 2009.
* NovaGold, alleging that the bid "significantly undervalues" its
shares, told investors to reject a hostile C$1.28 billion offer (C$14.50
per share) from Barrick Gold. Its directors and management have indicated
they do not intend to offer their 10% of shares to Barrick's bid, and the
company is suing the yellow metal giant for allegedly misusing confidential
information.
* The Bank of Canada believes the loonie is undervalued, and said today
in an internal note that if high commodity prices were properly taken into
account, its value would be US$0.91 instead of US$0.87 to US$0.89.
* Neurochem rocketed up, buoying the healthcare sector, as it received
mixed news from the U.S. FDA about its Kiacta drug for kidney problems.
While the FDA issued an "approvable" letter after Phase II/III trials, its
also requested additional efficacy information that may require another
trial.
* Compton Petroleum posted a C$69 million profit that more than tripled
from last year's C$22 million, yielding C$0.51 per diluted share compared
to C$0.17. The company increased oil and gas production 13%, despite a wet
spring that made drilling difficult.
* Oil dipped below US$72 this morning as the ceasefire in the Middle
East began, and BP indicated that half its oilfields in Prudhoe Bay would
be back online in the near future. It recovered somewhat, closing down
US$0.82 at US$73.53.
* Gold dipped US$5.10 to US$639.30, as world tensions relaxed.
-- Carolyn.Crapo@contractor.Thomson.com; Thomson Financial Corporate
Services
This is Thomson Financial Corporate Services Canadian Commentary, which
is updated twice daily. The information herein is believed to be true and
accurate, we take no responsibility for inaccurate information and reserve
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SOURCE Thomson Financial Corporate Group
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