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Shaw shares down with competition regulator set to oppose Rogers deal

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Toronto – Shares in Shaw Communications Inc. fell in early trading after the company and Rogers Communications Inc. said the Commissioner of Competition plans to block their merger.

Rogers and Shaw said late Friday they were informed that the commissioner intends to file applications to the Competition Tribunal in a bid to prevent the $26-billion merger.

The companies say they remain committed to the deal and have offered to address the competition concerns.

RBC Capital Markets analyst Drew McReynolds says he believes the probability of the deal ultimately getting approval remains high.

McReynolds says he believes changes to the deal can be made and that the Competition Bureau is focused on the nature of the remedy package.

Shaw shares were down $2.99 or about eight per cent at $34.57 in early trading on the Toronto Stock Exchange. Rogers has agreed to pay $40.50 per Shaw share.

This report by The Canadian Press was first published May 9, 2022.

Companies in this story: (TSX:SJR.B, TSX:RCI.B)

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Telus signs deal to buy LifeWorks in deal valued at $2.9 billion including debt

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VANCOUVER — Telus Corp. has signed a deal to buy LifeWorks Inc. valued at $2.9 billion including debt as it pushes further into employee wellness and healthcare services.

LifeWorks, formerly known as Morneau Shepell, is an HR firm that helps companies with employee and family assistance plans, absence management, pension and benefits administration and retirement planning.

The transaction will add LifeWorks’ employee and family assistance program and benefit administration capabilities to Telus Health’s digital technologies.

Telus Health offers virtual care and provides patients access to digital pharmacy options, home health monitoring and electronic health records.

“This transaction is financially compelling and strategically attractive to Telus, and a natural complement to Telus Health,” Telus CFO Doug French said in a statement Thursday.

The move comes as digital health and virtual care services saw great success during the COVID-19 pandemic amid lockdowns and concerns about spreading the virus.

Under the agreement, LifeWorks shareholders will have the option to receive $33 in cash or 1.0642 Telus shares for each LifeWorks share, subject to proration.

The amount of cash and number of shares will be limited so that Telus will pay for half the deal in cash and half in shares.

Scotiabank analyst Jeffrey Fan sees the transaction strengthening Telus’ place in the digital health industry.

“This acquisition will position the company as not only a significant force in the corporate well-being and EAP (employee assistance program) space in Canada but also opens the potential for more growth and tuck-ins internationally,” he said in a note to clients.

Desjardins analyst Jerome Dubreuil also views the proposed acquisition as a positive for Telus.

“The deal could also significantly increase Telus Health’s scale and make the unit mostly self-sufficient in terms of funding new initiatives,” he said in a note to clients.

Telus expects the transaction to help generate annual savings in the range of $170 million to $200 million over the next three-to-five years.

The combined companies have corporate clients across Canada, the U.S. and in over 160 countries covering more than 50 million lives globally.

While analysts are generally positive on the deal, some money managers aren’t totally excited about it in this market climate.

“The premium (Telus) is paying in a market that is only going one way is not a good look,” said Baskin Wealth Management’s chief investment officer Barry Schwartz.

The deal requires support by a two-thirds majority vote by LifeWorks shareholders as well as court and other regulatory approvals.

The companies hope to close the deal in the fourth quarter of 2022.

Telus said on the conference call with analysts that it does not anticipate much overlap on services between the two organizations both in Canada and internationally, and expects the regulatory process to be “smooth sailing.”

LifeWorks shares closed at $18.20 on the Toronto Stock Exchange on Wednesday. Telus shares closed at $29.36.

News of the deal sent LifeWorks stock up nearly 69 per cent in early trading Thursday.

This report by The Canadian Press was first published June 16, 2022.

Companies in this story: (TSX:T, TSX:LWRK)

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Alberta

Cenovus Energy acquires BP’s 50 per cent stake in Sunrise oilsands project

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CALGARY — Cenovus Energy Inc. says it has signed an agreement to buy the 50 per cent stake in the Sunrise oilsands project in northern Alberta that it does not already own from BP.

The company will pay $600 million in cash plus a variable payment with a maximum cumulative value of $600 million expiring after two years.

Cenovus will also give BP its 35 per cent stake in the undeveloped Bay du Nord project in offshore Newfoundland and Labrador.

Cenvous CEO Alex Pourbaix says acquiring the remaining working interest in Sunrise will allow the company to fully benefit from what he says are significant optimization opportunities.

Cenovus is the operator of the Sunrise project, which currently produces about 50,000 barrels per day. It expects to achieve nameplate capacity of 60,000 bpd through a multi-year development program.

The transaction has an effective date of May 1 and is expected to close in the third quarter of this year, subject to closing conditions.

This report by The Canadian Press was first published June 13, 2022.

Companies in this story: (TSX:CVE)

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