CANADA STOCKS-TSX falls as BMO deal pulls down banks

Fri Dec 17, 2010 10:28am EST
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 *TSX down 79.26 points, or 0.6 percent, at 13,101.97
 *BMO drops 6.4 pct after acquisition, share offer news
 *RIM gains 2.8 pct after results
 (Adds details, quote)
 By Jennifer Kwan
 TORONTO, Dec 17 (Reuters) - Toronto's main stock index fell
on Friday morning as Bank of Montreal BMO.TO skidded after it
said it would buy a U.S. regional bank for $4.1 billion and
issue C$800 million in new shares to help pay for it.
 BMO was among the most heavily traded stocks and dropped
6.4 percent to C$58.10.
 BMO's parent said on Friday it would buy Wisconsin bank
Marshall & Ilsley Corp MI.N in an all-stock deal that would
strengthen its position in the U.S. Midwest and more than
double its U.S. branch network. [ID:nN1744360]
 It said it would raise about C$800 million in additional
equity before completion of the acquisition.
 "It's not so much that they (investors) don't like the BMO
announcement. It's that it's being funded with a big stock
issuance," said Gavin Graham, president at Graham Investment
 "If there's going to be a whole bunch of new shares out
there why would you want to buy BMO shares at the moment."
 The news helped to push down the index's financial group,
which fell 1.2 percent. Royal Bank of Canada RY.TO was down
0.7 percent at C$51.51, and Toronto-Dominion Bank TD.TO fell
1.1 percent to C$71.50.
 At 10:08 a.m. (1508 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 79.26 points, or 0.6
percent, at 13,101.97. Eight of its 10 main sectors were
 Also on Friday, France's Total TOTF.PA said it would
spend C$1.75 billion to forge a partnership with Suncor Energy
SU.TO in Canada's oil sands. [ID:nLDE6BG0EZ]
 Suncor shares dropped 0.4 percent to C$36.33.
 Research In Motion RIM.TO was the most influential mover
on the upside, rising 2.8 percent to C$61.30. The Canadian
company said on Thursday that net profit jumped 45 percent and
it shipped 14.2 million devices in the three months to Nov. 27.
 ($1=$1.01 Canadian)
 (Reporting by Jennifer Kwan; editing by Peter Galloway)