Canadian stocks swung between gains and losses as acquisition targets Aurizon Mines (ARZ) Ltd. and Uranium One Inc. (UUU) rallied while energy producers declined as oil fell for a second day.
Aurizon Mines soared 35 percent, the most in more than six years, as Alamos Gold Inc. offered C$780 million for the company. Alamos sank 9.3 percent. Uranium One jumped 15 percent as Russian state-owned JSC Atomredmetzoloto planned to buy the rest of the company it doesn’t already own for C$1.3 billion. Research In Motion Ltd. surged 11 percent amid signs demand for rival Apple Inc.’s iPhone 5 is slipping. Tahoe Resources Inc. (THO) slid 7.2 percent after an attack at its silver mine.
The Standard & Poor’s/TSX Composite Index (SPTSX) was little changed at 12,600.68 at 11:53 a.m. in Toronto. The benchmark gauge has gained 1.3 percent this year.
“It’s a a bit of a quiet start to the week; some of it is nervousness after the strong start to the year,” Greg Taylor, fund manager with Aurion Capital Management, said on the phone from Toronto. His firm manages about C$8 billion ($8.12 billion). “The Alamos-Aurizon deal has people scratching their heads as there aren’t a lot of synergies. It’s strange why they’re making that acquisition. It seems RIM goes up when Apple goes down, and it probably isn’t any more complicated than that.”
Raw-material and information technology companies contributed most to gains in the S&P/TSX as five of 10 industries advanced. Trading volume is 128 percent higher than the 30-day average at this time of the day.
Aurizon, Uranium One
Aurizon Mines jumped 35 percent to C$4.60, headed for its biggest gain since May 2006. Alamos Gold, a gold producer in Mexico, offered to buy the company for either C$4.65 or 0.2801 of an Alamos share for each Aurizon share. If successful, the bid would give Alamos Gold access to projects in the Abitibi region of northwestern Quebec.
Alamos, which already owns a 16 percent stake in Aurizon, plunged 9.3 percent to C$15.34.
Uranium One soared 15 percent to C$2.78, the biggest intraday gain in nine weeks. Russia’s ARMZ, together with other units, owns 51.4 percent of Uranium One. The C$1.3 billion ($1.32 billion) offer is a 32 percent premium to the company’s 20-day weighted average price in Toronto, the company said.
RIM, which is set to debut its BlackBerry 10 line of smartphones on Jan. 30, climbed 11 percent to C$14.72. A report in Japan’s Nikkei newspaper today said Apple has reduced its orders for iPhone 5 screens this quarter by about half from its original target of 65 million displays. Apple fell 2.8 percent to $505.95 in New York, headed for its lowest closing level since February 2012.
Harry Winston Diamond Corp. gained 3.9 percent to C$14.81, paring earlier gains of as much as 12 percent after agreeing to sell its watch and jewelry unit to Swiss watchmaker Swatch Group AG for about $1 billion.
Robert A. Gannicott, chief executive officer with the diamond miner, told Bloomberg News the company is interested in acquiring Rio Tinto Group’s 60 percent stake in the Diavik mine in the Northwest Territories. Harry Winston owns 40 percent.
Tahoe Resources sank 7.2 percent to C$16.90 after the company said two security guards were killed in an ambush at its Escobal silver mine in Guatemala on Jan. 12. The attack was one of three against mining entities in Guatemala this week, Tahoe said.
Talisman Energy Inc. and Canadian Natural Resources Ltd. lost 2.6 percent and 0.9 percent respectively to pace declines in energy shares. Crude oil slipped 0.1 percent to $93.43 a barrel in New York. Talisman also slumped after the stock was cut to market perform from outperform at Raymond James Financial Inc.
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