TSX edges higher; Progress deal boosts energy shares

Thu Jun 28, 2012 5:11pm EDT
 
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By Allison Martell

TORONTO (Reuters) - Canada's main stock index rose on Thursday as a takeover offer for Progress Energy Resources Corp (PRQ.TO: Quote) boosted its stock and other natural gas plays in the heavyweight energy group.

Energy issues rose 2 percent after Malaysia's state oil company launched a friendly bid to buy Progress at a 77 percent premium to its Wednesday close.

The stock closed up 73.6 percent at C$20.05 and played the biggest role of any single company in leading the market higher.

"It's obvious that this is where a lot of strength is coming from," said Fred Ketchen, director of equity trading at ScotiaMcLeod. "People will say, if someone can come out and make a takeover bid for (Progress), well maybe Encana becomes a takeover target somewhere along the way."

Encana Corp (ECA.TO: Quote), Canada's largest natural gas producer and one of Progress's rivals, jumped on news of the deal, and closed up 6.7 percent at C$21.08. Encana was the most influential gainer in Toronto after Progress.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 13.76 points, or 0.12 percent, at 11,424.70.

CENTERRA, TAHOE SINK

The heavyweight materials group, which includes gold miners, and financial stocks were the two major drags on the index. Financial issues fell 0.4 percent, while materials stocks fell 1.5 percent.   Continued...

 
A Bay Street sign is seen at the financial district in Toronto, October 10, 2008. REUTERS/Mark Blinch