Skip to main content
new

These are stories Report on Business is following Tuesday, June 21. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.

Follow Michael Babad and Globe top business news on Twitter

RIM in the crosshairs? Shares of Research In Motion Ltd. rebounded today, though the stock still came nowhere near regaining the ground lost since its poor first-quarter results sparked a rout last week.

The plunge had sparked talk again of Canada's pride soon becoming a takeover target. We'd heard this before, of course, but the talk appeared to have picked up at a speed equal to the stock's decline before today's bounce.

"Given how significant the deterioration of the stock price has been, that alone will cause interest," said Paul Taylor, the chief investment officer at BMO Harris Private Banking in Toronto, according to Bloomberg News.

"RIM still has meaningful market share in the U.S. and meaningful market share internationally, and RIM has an iconic brand."

Mr. Taylor said "it's not hard to envision" a takeover bid of between $40 and $50 a share for the BlackBerry maker.

It was only a few years ago that RIM shares were trading above $140, and the company's market cap topped $80-billion. The stock is now trading at just shy of $28.

In the past, the buzz has suggested companies such as Microsoft Corp. or Oracle Corp. could take a run at RIM.

The Wall Street Journal noted last week that RIM could instead be broken up, given that even at its current price it's still a hefty target for an acquirer to digest. And its various pieces are valuable.

RIM has promised better times ahead, and exciting products, even as it slashed its financial forecast last week and promised job cuts. It's losing market share in the key U.S. market amid heightened competition from Apple Inc. , maker of the popular iPhone, and Google Inc. , whose Android operating system has been doing exceptionally well.

Encana joint venture ends A proposed $5.4-billion joint venture between Encana Corp. and China's largest oil and gas company has collapsed after the two sides couldn't agree on final details.

Encana said today the deal tied its B.C. Cutbank Ridge project with PetroChina International Investment Co. Ltd. fell apart, highlighting differences around the joint operating agreement. The deal would have marked China's largest investment into Canada's oil patch, The Globe and Mail's Carrie Tait and Nathan VanderKlippe report from Calgary.

Encana is now stuck sitting on rich gas deposits and in need of a wealthy partner to access the energy. As part of the 50-50 joint venture, PetroChina was suppose to pay for half of all future capital costs at Cutbank Ridge, helping Encana fund its operations elsewhere - a much needed source of cash with natural gas prices painfully low.

The collapse of the deal sparked an immediate reaction. UBS Securities Canada analyst George Toriola cut his 12-month price target on Encana shares to $33 (U.S.) from $35, and held his "neutral" rating unchanged, to "to reflect the collapse of this transaction, which had the potential to revalue the Cutbank Ridge assets."

Markets eye Greek vote Greece is in the eye of the storm today as the world watches the crucial confidence vote scheduled for about 5 p.m. ET.

The confidence vote is so key because it will determine whether the government of Prime Minister George Papandreou can push new austerity measures and secure a further €12-billion of its initial bailout package and another rescue plan that will take its place. Both are under discussion among officials of the EU and the International Monetary Fund who are demanding Parliament approve the cutbacks, which include slashing the public sector and hiking taxes. The money is key to meet debt payment deadlines.

"The issue here is not that Greek PM George Papandreaou cannot secure enough support through his own party since it holds a small majority of 155 seats out of 300," said economists Derek Holt and Karen Cordes Woods of Scotia Capital.

"The issue is that Greece is being told by the countries and agencies footing the bill that broadly based support is required, and that includes the opposition parties stepping up to the plate in order to express confidence in the government," they said in a report.

"Should opposition parties stand against the government tonight, an election call is quite likely and that faces the disruptive possibility of delaying bridge financing from the IMF. Since polls are showing that about half of Greeks oppose new austerity measures, an election could well play into the opposition's hands and weaken the resolve toward pursuing what other European leaders have stated is required by way of further austerity measures in order to secure additional bridge financing."

Greece's troubles, and the wider debt troubles of the 17 countries that share the euro, have rattled markets for more than a year now, and surviving a confidence vote is just one tiny step.

"A successful vote for Prime Minister Papandreou might bring further respite to the single currency and the recent volatility, as the likelihood would be that the austerity budget could well get through; however passing an austerity budget is one thing," said CMC Markets analyst Michael Hewson.

"Implementing it in the face of fierce opposition amongst the voters is something else and this might also play on politicians minds when it comes to the crunch, making the passing of the budget anything but a 'slam dunk.'"

Bombardier scores another C Series sale The order flow for the new C Series jet by Bombardier Inc. ticked up again today with the sale of 10 of the planes to Korean Air, the Canadian company's first Asian customer.

The order, announced the Paris Air Show, is worth about $660-million (U.S.) at list prices, though discounts are routinely available, especially for any new airplane's first customers, The Globe and Mail's Eric Reguly reports from Paris.

Bombardier also said VistaJet of Switzerland had placed an order for 10 Bombardier Global 8000 large business aircraft. Based on list prices, the order is worth about $650-million. VistaJet last month ordered two Bombardier Challenger 605 jets and six Global 6000 jets.

P&W eyes Mirabel Pratt & Whitney has put Canada on its list of potential testing and manufacturing sites for the hot-selling new turbofan engines that will power the next generation of Airbus jets.

At a press conference at the Paris Air Show today, P&W president David Hess said that the company's Mirabel site "is a candidate site" for the engines that will power the Airbus A320neo (short for new engine option), which has been one of the star sellers at the show.

Retail sales rise New cars and auto parts aside, Canadian shoppers are flagging.

Retail sales climbed 0.3 per cent, though were flat when you take out cars and parts, Statistics Canada said today.

New car dealers saw their sales rise 1.1 per cent, and parts shops posted a 6-per-cent gain. Lousy spring weather seems to have put a dent in building material and garden equipment sales, which slipped 2.8 per cent.

And there's something of a trend going on as sales at sporting goods, hobby, book and music stores fell for the fifth month in a row, declining 1.2 per cent.

Over all, economists had expected a better showing.

"Weakness came in building materials and gardening equipment, potentially affected by poor weather, but other sectors had fewer excuses for soft results," said Avery Shenfeld, chief economist at CIBC World Markets.

"The prior month's sales were also revised down a tick. In real terms, volumes were up 0.2 per cent. Over all, a soft report given the revisions, and consistent with April being a lacklustre month for GDP."

What's that mean going forward?

"With consumer spending expected to run at a modest 2.5-per-cent pace in the current quarter, consumers will not be the engine of growth that they were at the early stage of the economic recovery," said Toronto-Dominion Bank economic analyst Leslie Preston.

"That softening trend is seen no matter which way you slice it. Year-on-year rates of growth in headline retail sales, ex-autos, and in real terms have all decelerated significantly since earlier in the recovery and are off their pre-recessionary pace."

In Economy Lab today Has the American Dream lost its mojo? In the aftermath of the Great Recession, with its factory shutdowns and mass layoffs, the potential for upward mobility through ingenuity and elbow grease certainly seems to have diminished. Naomi Powell reports from Stockholm.

In International Business today The world did not end in February when Danish regulators forced haircuts on senior bondholders of a small bank that had burnt through its capital and could not repay creditors. Nor should it as a result of the Irish government's plans, revealed last week, to mete out similar treatment to bond investors in two defunct banks. The Financial Times examines the issue.

From today's Report on Business

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
AAPL-Q
Apple Inc
-1.06%171.48
CM-N
Canadian Imperial Bank of Commerce
+1.3%50.72
CM-T
Canadian Imperial Bank of Commerce
+1.13%68.67
GOOG-Q
Alphabet Cl C
+0.21%152.26
MSFT-Q
Microsoft Corp
-0.17%420.72
ORCL-N
Oracle Corp
+0.27%125.61

Interact with The Globe