TSX advances as gold snaps back, Potash rises
By Jennifer Kwan
TORONTO (Reuters) - Toronto's main stock index ended higher on Wednesday as investors hoped for a higher bid for takeover target Potash Corp, while gold miners also rose.
Investors continued to fixate on developments in BHP Billiton's campaign to take over Potash Corp. BHP said it would take its $39-billion, $130-a-share bid directly to shareholders, bypassing Potash Corp's board, which a day earlier called the bid "grossly inadequate".
Potash Corp shares gained 3 percent to C$151.75, helping the materials sector climb 1.9 percent. On Tuesday, Potash soared 26 percent.
"They're betting on either BHP raising their offer or another competitor coming in and competing for Potash," Aaron Fennell, senior market strategist at Lind-Waldock Canada, said of investor reaction.
Still, it's difficult to know how events will unfold, said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc.
"The price is clearly not where it needs to be, it's not obvious who would be the other bidders. It comes back to BHP and whether this is just a stink-ball bid just to test the waters or whether they're serious about things and come back with an enhanced offer," Taylor said.
The Toronto Stock Exchange's S&P/TSX composite index closed 52.44 points, or 0.45 percent, higher at 11,781.08, with eight of its 10 main groups higher.
Gold stocks helped boost the resource-heavy index, with Barrick Gold up 1.4 percent at C$46.50, while Goldcorp rose 3.9 percent to C$43.92. Agnico-Eagle advanced 1.3 percent to C$64.89. Continued...