Canadian Stocks Lower On M&A Blocks
Canadian stocks are lower today after the Canadian government's initial rejection of Petronas' $5.9 billion takeover bid for Progress Energy Resources Corp (PRQ.TO) and speculation that it will also block a $15.1 billion bid for Nexen Inc. (NXY.TO, NXY) from China state-owned CNOOC Ltd.
PRQ is down 10% but above session lows on Canada's main stock market, adding to the near 1% dropped Friday before the news, while NXY is near 5% lower. Strong gains for gold and other mining stocks are largely offsetting declines for shares of energy companies. But industrials are mostly lower, including a 1.5% slide for Finning International (FTT.TO), Canada's largest distributor of Caterpillar and other heavy-duty construction equipment. Caterpillar Inc ( CAT ) pared its growth prospects through 2015, sparking new worries over global growth.
Here's where the Canadian markets stand today:
- S&P/TSX Composite Index down 65.20 (-0.5%) to 12,350.78.
- S&P/TSX Venture Composite Index down 10.82 (-0.8%) to 1,304.80
In company news, Nexen (NXY,NXY.TO) are down about 5% this afternoon after the Canadian federal government late Friday unexpectedly rejected a bid by a Malaysian state-owned oil and gas company to acquire Progress Energy (PRQ.TO), casting new doubts over CNOOC's ( CEO ) ability to close on its $15.3 billion proposed buyout of NXY.
"I can confirm that I have sent a notice letter to Petronas indicating that I am not satisfied that the proposed investment is likely to be of net benefit to Canada," Christian Paradis, Canada's industry minister, wrote in a late-night statement.
Petronas, the Malaysian state-owned exploration and production company now has up to 30 days to make any additional representations and submit any further undertakings that could make its deal more palatable to the Canadian government.