TSX gains as Astral shares soar on BCE takeover
By Jennifer Kwan
TORONTO (Reuters) - Toronto's main stock index jumped on Friday as shares of Astral Media ACMa.TO soared on news that BCE Inc (BCE.TO: Quote) will buy the media company for C$3 billion.
The parent of Bell Canada said on Friday it has agreed to acquire Astral, its largest content provider, in a deal to lock up more of the programming carried over its media platforms and expand its presence in French-speaking Quebec.
Shares of Astral jumped 33.9 percent to C$48.55. BCE fell 1.1 percent to C$39.64.
The news comes on the heels of other recent takeover stories including Neo Material Technologies NEM.TO, which soared last week after Molycorp MCP.N said it would buy the rare-earth processing company in a C$1.3 billion deal.
Viterra VT.TO is also the focus of buyout talk with Swiss trading house Glencore (GLEN.L: Quote) planning a three-way carve-up of Canada's biggest grain handler with privately owned Richardson International and fertilizer producer Agrium (AGU.TO: Quote), according to an industry source.
"We like to see these deals. From Neo Materials to Viterra to Astral Media. What does this tell us? It tells us that valuations have gotten too cheap, there's a lot of excess cash," said Barry Schwartz, portfolio manager at Baskin Financial Services.
"You've got low interest rates so it's cheap to borrow money; credit is flowing again. In that situation we're just scratching the surface in terms of takeovers."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished the day up 41.14 points, or 0.33 percent, at 12,496.96, with five of its 10 main sectors higher. It slipped 0.05 percent for the week. Continued...