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WHAT'S ON TAP
Zijin buys Allied Gold for $5.5B
GST credit rebrands and expands
Hanwha aims at ASTL, MDA & TSAT
La Caisse sells 11% of Cogeco
Metro falls 5% on Q1 miss
HOT OFF THE PRESS
Zijin bids $5.5B for Allied
Chinese miner Zijin Gold announced a $5.5B deal to buy Allied Gold, representing a ~30% premium to the 30-day VWAP but skinnier versus current trading - given the crazy run in metals to start the year.
The transaction comes just weeks after the China deal and builds on a number of Canadian takeouts by Zijin, so regulatory approval feels likely here…
… especially considering Carney’s openness to foreign investment, the $220M break fee, and that the only thing Canadian about Allied is its P.O. box - with all of its gold production in Africa.
ON OUR RADAR
Flagging Carney’s grocery affordability initiative, which is an expansion of the GST credit - with a five-year, 25% increase and a 50% bump in year one. It’s a timely rebrand, given prices at the counter have led CPI prints month after month…
… but it’s unclear how much demand it will stimulate. On the supply side, $650M earmarked for easing food supply chain disruptions could move the needle.
GAINERS & LOSERS
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Korean conglomerate Hanwha announced a flurry of Canadian partnerships to sweeten its bid for our $60B submarine contract, one of many equipment initiatives sitting downstream of higher defense spend.
While Algoma Steel’s MOU was the most explicit in its conditionality (no submarine deal, no $345M in support)…
… it’s likely implied that turning the MOUs with MDA Space and Telesat into real business is contingent on a winning bid. With MDA facing competition from SpaceX and TSAT’s legacy business eroding…
… Hanwha is applying leverage in the right places, but its success isn’t a sure thing - with Germany’s ThyssenKrupp also deep in the process.
Cogeco Communications (CCA) was down 6% on the back of La Caisse’s decision to sell down part of its position at $67.45 per share. At 11% of shares outstanding ($229M), it’s a big block - but it’s unlikely to be an incremental overhang…
… as the fund remains the largest holder, with no indication it will keep selling.
INSIDER TRANSACTIONS
| Insider | Company | Value |
|---|---|---|
| Karen Liu | First Majestic (AG) | $2.4M |
| David Soares | First Majestic (AG) | $7.2M |
| Michael Deal | First Majestic (AG) | $1.7M |
| David Smith | First Majestic (AG) | $930K |
| David Neuburger | Denison (DML) | $399K |
| Alexandra Horvath | Headwater (HWX) | $857K |
| Bradley Christman | Headwater (HWX) | $553K |
| Terry Danku | Headwater (HWX) | $1.1M |
EARNINGS
YESTERDAY’S EARNINGS
| Company | Actual | Consensus |
|---|---|---|
| 🇨🇦 Metro (MRU) | 1.16 | 1.20 |
| 🇺🇸 UnitedHealth (UNH) | 2.11 | 2.11 |
| 🇺🇸 Raytheon (RTX) | 1.55 | 1.47 |
| 🇺🇸 United Parcel (UPS) | 2.38 | 2.20 |
Metro (MRU) reported Q1 results that missed expectations due to slowing same-store sales growth - sending shares down 5%…
… and bringing MRU back in-line with its long-term average valuation.
TODAY’S EARNINGS
| Company | Time | Consensus |
|---|---|---|
| 🇨🇦 CGI (GIB-A) | AM | 2.11 |
| 🇨🇦 CPKC (CP) | PM | 1.35 |
| 🇨🇦 Celestica (CLS) | PM | 1.76 |
| 🇨🇦 Exco (XTC) | PM | 0.15 |
| 🇺🇸 Microsoft (MSFT) | PM | 3.92 |
| 🇺🇸 Meta (META) | PM | 8.18 |
| 🇺🇸 Tesla (TSLA) | PM | 0.45 |
| 🇺🇸 Starbucks (SBUX) | PM | 0.59 |
ECONOMIC DATA
TODAY’S ECONOMIC RELEASES
| Release | Time | Consensus |
|---|---|---|
| 🇨🇦 BoC Rate Decision | 9:45AM | 2.25% |
| 🇺🇸 Fed Rate Decision | 2:00AM | 3.75% |
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