public offering

THE WESTAIM CORP. $5.40 (Toronto symbol WED; Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Speculative) is developing emerging technologies through two subsidiaries, Nucryst Pharmaceuticals Corp. (Toronto symbol NCS) and iFire Technology Corp. Nucryst recently sold shares to the public, and Westaim hopes to take iFire public as well. Nucryst makes medical products that prevent infections in burns and wounds. It has a licensing agreement with UK-based medical device maker Smith & Nephew plc, which helps offset its development costs. Nucryst’s recent public offering cut Westaim’s interest, from 100% to 75.1%. iFire is currently perfecting a new way to make large-size, flat-screen TV sets. Unlike traditional flat-panel displays, which use gasses, liquids or vacuums, iFire’s process applies layers of chemicals onto glass panels. That speeds up the manufacturing process, and cuts costs....

BCE INC. $29 (Toronto symbol BCE; SI Rating: Above average) has struggled in the past few years due to increasing competition in its core telephone business, which supplies 40% of its revenue and half of its profit. It also suffers from a “holding company discount": the current price of the stock is less than the total value of its various assets (wireless, Internet, satellite TV, etc.). Selling or rearranging these assets would give BCE more cash and/or income, and let it focus on its core operations.

Older businesses go into new trust

BCE now hopes that several recent announcements will simplify its operations and spur the stock price. The latest is a proposal to form a new trust that will hold its rural telephone lines in Ontario and Quebec. The new trust will also hold the land-line business of 53.2%-owned Aliant Inc., which is the main telephone company in Atlantic Canada. BCE will own 73.5% of the new trust, but that will fall to 45% after it hands out some of these units to its owns shareholders as a tax-deferred distribution. The company will also assume control over Aliant’s wireless business, which will expand the geographic reach of it’s own wireless operations....

THE WESTAIM CORP. $5.23 (Toronto symbol WED; SI Rating: Speculative) now owns about 71% of subsidiary Nucryst Pharmaceuticals Corp., following its initial offering of Nucryst shares to the public in December 2005. Nucryst will use most of the funds it raised to develop its patented burn and wound dressings, which beat traditional treatments at preventing infection. However, this is a highly competitive field, and success is by no means certain. In addition, Nucryst will probably need to raise more money and this will dilute the interests of current investors. Westaim also plans an eventual public offering for another subsidiary, iFire Technology Corp. iFire has just built a facility where it will test the feasibility of its flat panel display technology. The company claims that its process produces sharper, clearer displays than current technologies, and can cut manufacturing costs by up to 40%. Westaim is still a hold for aggressive investors.