BUSINESS

TSX up slightly, BlackBerry flat as Fairfax Financial makes US$9 a share offer

09/23/2013 08:34 EDT | Updated 11/23/2013 05:12 EST
TORONTO - The Toronto stock market closed little changed Monday as resource stocks failed to benefit from strong Chinese manufacturing data while BlackBerry shares (TSX:BB) (Nasdaq:BBRY) finished flat following a move to take the company private.

The S&P/TSX composite index edged up 4.73 points to 12,811.2.

BlackBerry has signed a letter of intent with a consortium led by its biggest shareholder, Fairfax Financial (TSX:FFH), that involves shareholders getting US$9 a share. The Waterloo, Ont.,-based company's shares were unchanged from Friday at $9.08 as some analysts were clearly unimpressed by the offer. On the Nasdaq, the shares rose 9.5 cents to US$8.82.

"This deal is an excellent example of another great Canadian takeunder, as opposed to takeover," observed Chris King, portfolio manager at Morgan, Meighen and Associates.

"If one were to take a cash per share value, a reasonable range of value for intellectual property, and that there is value in the BBM, and co-location of exchange servers in major companies, the offer value seems to be low. The deal is structured to allow for competing bids, so hopefully a strategic purchaser might emerge."

Word of the proposed sale came as BlackBerry stock sunk as much as seven per cent in the morning, on top of a 16 per cent plunge Friday after the company warned of a huge second-quarter loss of almost $1 billion amid plunging sales of its new smartphones. It's also slashing about 4,500 jobs.

BlackBerry releases its quarterly results Friday.

It was a much different story at Apple. Its stock rose almost five per cent to US$490.64 after it said shoppers had snapped up nine million of the newest iPhones since the devices rolled out Friday.

The Canadian dollar was up 0.13 of a cent to 97.23 cents US.

The potential for a budget fight in Washington pushed American markets lower.

The Dow Jones industrials was down 49.71 points to 15,401.38 while the Nasdaq declined 9.44 points to 3,765.29 and the S&P 500 index slipped 8.07 points to 1,701.84.

With no indications of an early reduction in quantitative easing, investors are now turning their focus to the possibility of a government shutdown amid negotiations to raise the U.S. debt ceiling.

Federal Reserve chairman Ben Bernanke said last week that concerns over the latest fiscal showdown was a factor in the U.S. central bank's decision to maintain its asset purchase program. The Fed surprised markets by not announcing that it would start tapering its monthly US$85 billion of bond purchases.

The TSX telecom sector was up 1.16 per cent on news that Telus (TSX:T), Bell Mobility (TSX:BCE), Rogers Communications (TSX:RCI.B) and Quebecor’s Videotron (TSX:QBR.B) were among the prominent telecom companies that have put down a deposit to take part in Canada’s wireless spectrum auction next January. Industry Canada says that a total of 15 participants have put down the deposit for the auction, all of them domestic. Telus led the pack, up 86 cents to $35.44.

Commodity prices were lower despite signs that the world’s second-biggest economy is gradually recovering from a prolonged slowdown.

The preliminary version of HSBC’s purchasing managers’ index for China climbed to a six-month high of 51.2 from 50.1 in August on a 100-point scale. Numbers above 50 indicate an expansion in activity.

November crude on the New York Mercantile Exchange dropped $1.16 to US$103.59 a barrel. Prices fell almost four per cent last week amid dealmaking aimed at eliminating Syria’s chemical weapons and the energy sector edged up 0.08 per cent. Suncor Energy (TSX:SU) improved by 28 cents to C$37.17.

The gold sector was down almost two per cent while December bullion declined $5.50 to US$1,327 an ounce. Goldcorp Inc. (TSX:G) faded 71 cents to C$26.25.

The base metals sector slipped one per cent as December copper lost two cents to US$3.30 a pound. HudBay Minerals (TSX:HBM) gave back 25 cents to C$8.36.

Elsewhere on the corporate front, Calgary-based fertilizer producer Agrium Inc. (TSX:AGU) said its third-quarter results will be negatively affected by soft prices and lower sales volumes in its wholesale operations. It says wholesale earnings before interest and tax will be about $200 million lower than in the same period last year.

Agrium also said it will increase its annual dividend 50 per cent to US$3 a share per share, but its stock fell $4.01 to $89.49.