UPDATE 2-Toronto stocks lifted by TransAlta, banks

Mon Jul 21, 2008 12:04pm EDT
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TORONTO, July 21 (Reuters) - The Toronto Stock Exchange's main index rose more than 200 points late on Monday morning before pulling back a little, boosted by a takeover offer for TransAlta Corp TA.TO and better-than-expected results from Bank of America BAC.N, which encouraged Canadian bank stocks.

The S&P/TSX composite index .GSPTSE was up 180.51 points, or 1.3 percent, at 13,696.47, with seven of its 10 main subgroups higher.

The utilities sector, up 5 percent, led the advance after news that TransAlta, Canada's biggest independent power producer, could be taken over in a C$7.75 billion deal.

Early on Monday, private equity firms LS Power Equity Partners and Global Infrastructure Partners said they plan to buy the wholesale power generator and marketer in a C$39 per share, all-cash deal, representing a 21 percent premium on its closing price on Friday.

Shares of TransAlta were up C$4.12, or 12.8 percent, at C$36.37.

Also supporting the index were financial-services shares, up 1.6 percent, after the Bank of America, the No. 2 bank in the United States, beat profit expectations.

Royal Bank of Canada RY.TO was up 68 Canadian cents, or 1.5 percent, at C$45.38, while Toronto-Dominion Bank TD.TO rose C$1.80, or 3.1 percent, to C$60.33. ($1=$1.00 Canadian) (Reporting by Jennifer Kwan; Editing by Peter Galloway)