CP outlook, Valeant deal inject cheer into TSX
By Alastair Sharp
TORONTO (Reuters) - Canada's main stock index notched a solid gain on Tuesday, helped by a surge in Valeant Pharmaceuticals International Inc (VRX.TO: Quote) after it said it planned to buy Botox maker Allergan Inc (AGN.N: Quote) and an upbeat outlook from Canadian Pacific Railway Ltd (CP.TO: Quote).
Valeant is not the only acquisition story bubbling in Canada, with major gold miner Barrick Gold Corp (ABX.TO: Quote) looking to snap up a smaller producer and its rival Goldcorp Inc (G.TO: Quote) having just walked away from another deal.
"There's nothing like acquisitions to get everybody's juices going," said John Ing, president of Maison Placements Canada. "Barrick remains a big trader on speculation on whether they return to the bargaining table."
Barrick gained 1.8 percent to C$19.37 in heavy trade as Goldman Sachs upgraded the stock to a "buy" from "neutral" and investors placed bets on whether it can pull off a bid for Newmont Mining Corp (NEM.N: Quote).
Sources told Reuters on Monday that talks had hit a snag but are likely to resume with both companies eager for a deal.
Valeant gained 7.7 percent to C$149.38 as investors cheered its latest acquisition plan, a partnership with activist investor Bill Ackman that could make Valeant a top five global pharmaceutical company.
"Valeant is a growth story. There is a big chunk of the market that likes growth," said Michael Simpson, a senior portfolio manager at Sentry Select Capital Corp.
"They like the fact that they're possibly teaming up with an activist investor who's got a decent track record, Bill Ackman, in their potential acquisition of Allergan." Continued...