Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
Marlboro cigarette maker Altria Group Inc (MO-N) said on Friday it will invest $2.4-billion in the Canadian cannabis producer Cronos Group Inc. (CRON-T; CRON-Q) taking a 45-per-cent stake in the company as it enters a rapidly growing legal marijuana industry.
Altria will buy 146.2 million of newly issued Cronos shares at $16.25 per share, a 16.2 per cent premium to the stock’s Thursday close on the Toronto Stock Exchange.
After the deal is closed, Altria will have the right to nominate four directors, including one independent, to the Cronos board.
Cronos announced earlier this week that Altria could make a possible investment hours after Reuters reported the tobacco giant was in talks to acquire Cronos.
The deal includes a warrant to acquire additional ownership interest in Cronos at a price of $19 per share over the next four years, which could raise Altria’s stake to 55 per cent.
Shares of Altria were up 1.1 per cent at $54.99 in premarket trading.
- Reuters
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Cardinal Energy Ltd. (CJ-T) is cutting its dividend citing “volatility in Canadian oil price differentials, coupled with the recent decline in world oil prices.” Cardinal said it will temporarily reduce its monthly dividend to a penny or 12 cents annually, starting in December. That’s down from a monthly dividend of 3.5 cents in November, according to its website.
"During the fourth quarter, Canadian oil producers have received embarrassingly low prices due to lack of pipeline egress," the company stated. "Industry is looking to truck and rail solutions to move oil to market instead of transporting it through the safest most cost-effective way in pipelines. Our lack of provincial and federal government leadership and failure to act in getting new export pipelines built is costing not only Alberta, but all Canadians significant revenue and future investment in our country. This week's Alberta government announcement is a much needed short-term solution but will not solve the long-term takeaway capacity issue facing our industry."
It added that, "although we don't think that the current pricing differentials between Canadian barrels and U.S. barrels will be permanent, we are obligated to our shareholders to protect our business and our balance sheet until Canadian prices improve."
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Reitmans Canada Ltd. (RET.A-T) reported sales for the 13 weeks ended Nov. 3, its third quarter for fiscal 2019, were $239.7-million as compared to $242.4-million for the 13 weeks ended Oct. 28, 2017, which included a reduction of 28 stores.
"The company continues to execute against a plan adapting to the new retail environment by reducing its store presence in select markets while enhancing its e-commerce capabilities," it stated in a release. "Sales were negatively impacted by approximately $1-million due to the third quarter of fiscal 2019 ending one week later than the third quarter of fiscal 2018."
Same-store sales, including e-commerce sales, increased 0.2 per cent.
Net earnings for the third quarter were $8.9-million or 14 cents per share as compared with a net loss of $16.8-million or 27 cents for the third quarter of fiscal 2018. "The improvement in net earnings of $25.7-million is attributable to improved results from operating activities in the third quarter of fiscal 2019 and a goodwill impairment charge that had been recorded during the third quarter of fiscal 2018," the company stated.
Excluding the $26.3-million impairment of goodwill charge, net earnings for the third quarter were $9.5-million as compared to $8.9-million in net earnings for the third quarter of fiscal 2019, the company stated.
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Canopy Rivers Inc. (RIV-X) says it has increased its ownership stake in CanapaR Corp., the Canadian parent corporation of CanapaR SrL, an Italy-based organic hemp production and processing platform.
The investment increases the company’s ownership position to 49.9 per cent and "builds upon Canopy Rivers’ international expansion strategy and positions the company to capitalize on the expected growth in demand for cannabis and CBD derivative products in the rapidly growing European cannabis market," it stated.
The company said it has committed, through its wholly owned subsidiary, $17.4-million to be invested in CanapaR Canada in two tranches as part of a planned $25-million non-brokered private placement.
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Supremex Inc. (SXP-T) announced a plan to reduce operating expenses at its Canadian envelope operations “to improve resource allocation and further support the company’s diversification strategy into the growing packaging market.”
Supremex said it is reducing its Canadian envelope facilities headcount by a total of 41 employees, or approximately 8 per cent of its Canadian envelope workforce. "These measures will result in annual cost reductions of approximately $2.7-million, before taxes, which will progressively materialize in the current quarter and will take full effect in 2019," the company stated. It said it will take a one-time charge of approximately $1.4-million, before taxes, in the fourth quarter.
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Automotive Properties Real Estate Investment Trust (APR.UN-T) says it has an agreement to acquire a portfolio of 11 properties from a privately held automotive dealership group and subject to a leaseback, for a combined purchase price of approximately $101.3-million.
“This is our largest property acquisition to date and we look forward to adding a major new tenant group to our portfolio,” said Milton Lamb, CEO of the REIT. “The acquisition marks our entry into the Ottawa market, effectively positioning us in another major Canadian metropolitan area.”
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Liberty Health Sciences Inc. (LHS-CN) issued a statement saying it is aware of a short-seller report “attempting to manipulate Liberty’s share price through a series of unconfirmed allegations.”
The company said the report "contains a number of factual errors and outdated information. As cited in the report's disclaimers, its authors stand to benefit financially by manipulating Liberty's stock. Investors should exercise caution in relying on the statements contained in this report."
Liberty also said it takes "the unconfirmed allegations contained in the report very seriously and will provide updates as they relate to this matter in due course."
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Callidus Capital Corp. (CBL-T) issued a release saying a special committee of the board acknowledges an announcement that Braslyn Ltd. submitted a non-binding proposal to acquire all the outstanding publicly traded common shares of the company it doesn’t already for $2 per share in cash.
Callidus said the special committee "has been in the process of reviewing, discussing and negotiating the proposal with Braslyn since receiving it on Nov. 28."
The company said shareholders will be notified of any binding agreement entered into by Callidus with Braslyn through a news release.