The Successful Investor Hotline – Friday, June 5, 2015

Article Excerpt

SNC-LAVALIN GROUP INC., $46.40, Toronto symbol SNC, gained 3% this week on speculation that larger engineering firms in Spain and Australia are interested in buying the company. The stock fell to $36.24 in March 2015 after the RCMP laid charges against SNC and two of its subsidiaries for using bribes to win construction contracts in Libya between 2001 and 2011. These are the same allegations that prompted the company to replace its senior executives in 2012 and bring in a new program to enforce ethical practices. SNC plans to fight these charges. The company continues to win public works contracts, including one for building a new bridge in Montreal and another for a transit line in Toronto. That’s why the stock has recovered to its current level. A takeover seems unlikely until SNC settles these charges. In addition, Quebec’s public pension plan, the Caisse de dépôt et placements du Québec, owns 12.17% of SNC and would probably block a sale. Still, the stock should…