merger

Loblaw shares hovered between $30 and $40 between 2008 and 2012. That’s mainly because the company had trouble upgrading its inventory-management systems and streamlining its distribution networks. As a result, many of its stores frequently ran out of basic items. The company has fixed these problems and is now enjoying the benefits of its new systems. In addition, its 2014 purchase of the Shoppers Drug Mart chain sets it up for years for growth. LOBLAW COMPANIES LTD. $65 (Toronto symbol L; Con- servative Growth Portfolio, Consumer sector; Shares outstanding: 412.4 million; Market cap: $26.8 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.5%; TSINetwork Rating: Above Average; www.loblaw.ca) opened its first self-serve, cash-and-carry grocery store in Toronto in 1919....

CANADIAN PACIFIC RAILWAY LTD. $175 (Toronto symbol CP; Conserva- tive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.9 million; Market cap: $26.8 billion; Price-to-sales ratio: 3.9; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.cpr.ca) has revised its takeover offer for U.S.-based railway Norfolk Southern Corp. (New York symbol NSC). The combined firm would be North America’s largest railway, with more than 56,000 kilometres of track. Buying Norfolk would also give CP greater access to ports on the U.S. Gulf Coast and Atlantic Ocean. Under the new deal, Norfolk shareholders would receive more stock and less cash: $32.86 U.S. a share in cash plus 0.451 of a CP share. That would give them 47% of the combined company, compared to 41% under the original offer....

CANADIAN PACIFIC RAILWAY LTD. $175 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.9 million; Market cap: $26.8 billion; Price-to-sales ratio: 3.9; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.cpr.ca) has revised its takeover offer for U.S.-based railway Norfolk Southern Corp. (New York symbol NSC). The combined firm would be North America’s largest railway, with more than 56,000 kilometres of track. Buying Norfolk would also give CP greater access to ports on the U.S. Gulf Coast and Atlantic Ocean. Under the new deal, Norfolk shareholders would receive more stock and less cash: $32.86 U.S. a share in cash plus 0.451 of a CP share. That would give them 47% of the combined company, compared to 41% under the original offer....

CANADIAN PACIFIC RAILWAY $190.97 (Toronto symbol CP; Shares outstanding: 152.9 million; Market cap: $29.4 billion; TSINetwork Rating: Above Average; Yield: 0.7%; www.cpr.ca) has offered to buy U.S. railway Norfolk Southern (New York symbol NSC). The combined company would be North America’s largest railway, with more than 56,000 kilometres of track. Buying Norfolk would also give CP greater access to ports on the U.S. Gulf Coast and Atlantic Ocean. Norfolk shareholders would receive $46.72 U.S. a share in cash and 0.348 of a CP share (or roughly 50% in cash and 50% in stock). That would give them 41% of the combined firm....

PFIZER INC. $33 (New York symbol PFE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 6.2 billion; Market cap: $204.6 billion; Price-to-sales ratio: 4.1; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.pfizer.com) has agreed to merge with Irish drug maker Allergan plc (New York symbol AGN). Allergan makes a variety of drugs, including treatments for Alzheimer’s disease, depression, dry eye, enlarged prostate, overactive bladder, cystic fibrosis and bacterial infections. It also makes the anti-wrinkle drug Botox. Under the deal, Allergan shareholders will receive 11.3 Pfizer shares for each share they hold. That will give them a 44% stake in the combined company, which will be the world’s biggest pharmaceutical maker....

BUCKEYE PARTNERS L.P. $67 (www.buckeye.com) is seeing strong demand for its oil-storage terminals as many producers store their crude instead of selling it at today’s depressed prices. However, lower prices are hurting revenue at Buckeye’s wholesaling business, which sells refined fuels, such as gasoline, home heating oil and propane....

With plans to boost production by 75% over three years, Alamos Gold is poised to benefit from a recovery in the gold price

CANADIAN PACIFIC RAILWAY LTD., $198.88, Toronto symbol CP, has offered to buy U.S.-based railway Norfolk Southern Corp. (New York symbol NSC). The combined firm would be North America’s largest railway, with more than 56,000 kilometres of track. Buying Norfolk would also give CP greater access to ports on the U.S. Gulf Coast and Atlantic Ocean. Norfolk shareholders would receive $46.72 U.S. a share in cash and 0.348 of a CP share (or roughly 50% in cash and 50% in stock). That would give them 41% of the combined company....

SHERRITT INTERNATIONAL $0.79 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 293.9 million; Market cap: $226.3 million; No dividends paid) is now focused on nickel production, with operations in Cuba and Canada. As well, it has a 40% interest in the Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and manages 506 megawatts of power generation capacity in Cuba. In the three months ended September 30, 2015, the company’s revenue fell 25.3%, to $76.9 million from $102.9 million a year earlier, mostly due to lower oil and gas prices. Cash flow per share fell sharply, to $0.05 from $0.16....

APACHE CORP., $48.97, New York symbol APA, fell 8% after rival oil producer Anadarko Petroleum (New York symbol APC) withdrew its merger offer. Savings from eliminating overlapping functions would have helped the combined firm cope with weak oil prices.

Meanwhile, Apache produced 486,409 barrels of oil equivalent a day in the three months ended September 30, 2015, up 6.8% from 455,295 a year earlier. The gain mainly came from improving efficiency at the company’s international operations, including its offshore wells in the North Sea.

However, lower oil prices resulted in a $0.05-a-share loss, compared to a profit of $1.27 a share a year earlier. Even so, that was much better than the consensus estimate of a $0.36-a-share loss. Revenue dropped 56.5%, to $1.5 billion from $3.4 billion.

OUR RECOMMENDATION: Apache is still a hold.

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