pension plan

GENNUM CORP. $10 (Toronto symbol GND; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.6 million; Market cap: $356.0 million; SI Rating: Above average) has acquired ASIC Architect Inc., a California-based developer of products for highspeed computer networks. The $1.5 million purchase price is equal to 25% of the $5.9 million or $0.17 a share that Gennum earned in its second fiscal quarter ended May 31, 2008 (all amounts except share price and market cap in U.S. dollars). The acquisition should help Gennum take advantage of rising demand for high-speed data communications equipment. Gennum is a buy. PETRO-CANADA $47 (Toronto symbol PCA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 484.4 million; Market cap: $22.8 billion; SI Rating: Average) continues to profit from high energy prices, which offset lower production from its offshore operations in Eastern Canada. In the three months ended June 30, 2008, earnings rose 46.0% to $2.38 a share from $1.63 a year earlier. These figures exclude unusual items. Cash flow per share jumped 49.3%, to $4.09 from $2.74. Revenue grew 38.2%, to $7.6 billion from $5.5 billion....

BCE INC. $39 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 805.3 million; Market cap: $31.4 billion; SI Rating: Above average) now aims to complete its sale to a group of private investors headed by the Ontario Teachers’ Pension Plan by December 11, 2008. The consortium will still pay $42.75 a share, but BCE has agreed to stop paying dividends to its common shareholders. Suspending dividends will save BCE about $900 million, and make it easier for BCE’s buyers to secure the funds from lenders they need to complete the acquisition. The stock continues to trade about 9% below the offer price. That’s because the recent liquidity problems in the credit markets limit demand for new bonds, and could prompt the lenders to break...

MANITOBA TELECOM SERVICES INC. $41 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 64.6 million; Market cap: $2.6 billion; SI Rating: Average) is Manitoba’s main provider of regular and wireless phone services, with over 90% of the market. The company also owns Allstream, which provides communication services to businesses across Canada. Allstream accounts for 60% of Manitoba Tel’s revenue, but just 40% of its profit. The company recently dissolved a partnership it formed with the Canada Pension Plan Investment...

BCE Inc. recently won a legal ruling against a lawsuit launched by its bondholders to block its $42.75-a-share takeover by a consortium led by the Ontario Teachers’ Pension Plan. BCE has also agreed to alter some of the terms to help speed up the takeover. If the buyout goes through, many of BCE’s investors will want to re-invest their proceeds in other high-yielding telecom stocks. Here are three we see as buys. The influx of former BCE investors should also help push up their stock prices....

BCE INC. $39.25, Toronto symbol BCE, gained $4 last Friday after it agreed to stop paying common share dividends as part of a new deal with the consortium headed by the Ontario Teachers’ Pension Plan that plans to buy BCE. The consortium will still pay $42.75 a share for BCE, and aims to close the transaction by December 11, 2008. However, suspending the dividend will save the company about $900 million, and make it easier for the consortium to secure the roughly $35 billion from lenders they need to complete the acquisition. The consortium has also agreed to pay BCE $1.2 billion if it backs out of the deal, up 20% from the original break-up fee of $1 billion. BCE is still a buy....

Watch Pat McKeough’s June 20 interview on the Business News Network “Market Call” program with Michael Hainsworth. Click here to see the interview. Or, go to www.bnn.ca and you’ll find the link on the lower right side of the page. BCE INC. $34.60, Toronto symbol BCE, should move higher next week now that the Supreme Court of Canada has ruled against a lawsuit launched by the company’s bondholders. The bondholders claimed that the takeover of BCE by a consortium headed by the Ontario Teachers’ Pension Plan would reduce the security of their investments. While this latest ruling greatly improves the chances the $42.75-a-share takeover will go through, problems in the debt markets could still prompt some of the consortium members to back out. That could force the buyers to delay, reprice or scrap the deal. If so, the stock will probably fall, but it is likely to stay above its pre-takeover level of around $30 a share....

BANK OF NOVA SCOTIA $51.41 (Toronto symbol BNS: SI Rating: Above average) earned $980 million in its second fiscal quarter ended April 30, 2008, down 5.8% from $1.04 billion a year earlier. Per-share earnings fell 5.8%, to $0.97 from $1.03. The declines were largely due to higher provisions for loan losses, which jumped to $153 million from an unusually low $20 million in the year-earlier quarter. Revenue rose 3.2%, to $3.2 billion from $3.1 billion, partly due to acquisitions. The bank has increased its quarterly dividend 4.3%, from $0.47 a share to $0.49. The new annual rate of $1.96 yields 3.8%. Bank of Nova Scotia is a buy....

BCE INC. $34.47 (Toronto symbol BCE; SI Rating: Above-Average) is now appealing to the Supreme Court of Canada to overturn a ruling by the Quebec Supreme Court in favour of a lawsuit launched by the company’s bondholders to block the takeover. The bondholders felt it reduced the security of their investments. The Quebec ruling threatens BCE’s $42.75- a-share takeover by a consortium headed by the Ontario Teachers’ Pension Plan. It could delay the takeover beyond the June 30, 2008 target date. It could also force the consortium to re-price or scrap the takeover. Depending on the circumstances, BCE may receive a $1 billion or $1.24 a share break-up fee from the consortium if the deal falls through. That’s equal to 3% of its market cap of $30 billion. The company could use that cash to expand its wireless and high-speed Internet services, or increase its $1.46 dividend (4.2% yield)....

BANK OF NOVA SCOTIA $49.75, Toronto symbol BNS, earned $980 million in its second fiscal quarter ended April 30, 2008, down 5.8% from $1.04 billion a year earlier. Per-share earnings fell 5.8%, to $0.97 from $1.03. The declines were largely due to higher provisions for loan losses, which jumped to $153 million from an unusually low $20 million in the year-earlier quarter. Revenue rose 3.2%, to $3.2 billion from $3.1 billion, partly due to acquisitions. The bank has increased its quarterly dividend 4.3%, from $0.47 a share to $0.49. The new annual rate of $1.96 yields 3.9%. Bank of Nova Scotia is a buy....

BCE INC. $33.60, Toronto symbol BCE, fell sharply this week after Quebec’s Supreme Court ruled in favour of a lawsuit launched by the company’s bondholders to block the takeover. The bondholders felt it reduced the security of their investments. BCE and the Ontario Teachers’ Pension Plan, which heads a private group that has agreed to buy BCE for $42.75 a share, plan to appeal this ruling to the Supreme Court of Canada. That will likely delay the takeover beyond the June 30, 2008 target date. It could also force the consortium to re-price or scrap the takeover. Depending on the circumstances, BCE may receive a $1 billion or $1.24 a share break-up fee from the consortium if the deal falls through. That’s equal to 3% of its market cap of $30 billion. The company could use that cash to expand its wireless and high-speed Internet services, or increase its $1.46 dividend (4.3% yield). BCE could also unlock some of its value by spinning off some of its operations....