Stocks to Watch: Spinoffs, Acquisitions and Market Moves

Here’s a round-up of news for Canadian investors this week.

Maple Leaf Foods
TMX Group
MEG Energy
Stella-Jones
Algoma Steel

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Maple Leaf Foods completes pork spinoff of Canada Packers

Maple Leaf Foods Inc. (TSX: MFI) has completed the spinoff of its pork operations into a standalone company, Canada Packers Inc. Canada Packers’ common shares are expected to begin trading on the Toronto Stock Exchange under the ticker CPKR. This structural change separates Maple Leaf’s prepared foods business from its primary pork production activities to provide clearer strategic focus for both companies.

Maple Leaf will retain a 16 per cent stake in Canada Packers and the two companies have agreed to an evergreen supply arrangement. Under that agreement, Canada Packers will supply pork products to Maple Leaf’s prepared meats operations, and Maple Leaf will serve as an anchor customer for the new company.

Michael McCain, executive chair at both Maple Leaf Foods and Canada Packers, said the separation allows each business to pursue its own investment profile with dedicated management teams. McCain also reaffirmed the McCain family’s ongoing commitment to the long-term prospects of both firms.

TMX Group acquires U.S.-based data and analytics provider Verity

TMX Group (TSX: X), the operator of the Toronto Stock Exchange and related markets, has acquired Verity, a U.S.-based provider of investment research management systems and enhanced equity data. Financial terms of the acquisition were not disclosed.

Verity offers two primary products: VerityRMS, a research management system used by asset managers and analysts, and VerityData, a data product focused on public equity filings and analytics. The addition is intended to broaden TMX’s data and analytics capabilities for institutional and global clients.

Michelle Tran, president of TMX Datalinx, said integrating Verity’s tools will strengthen TMX’s ability to serve a growing international client base that requires both research workflow solutions and richer, structured company filing data.

MEG Energy says Glass, Lewis recommends shareholders back Cenovus offer

MEG Energy Corp. (TSX: MEG) announced that proxy advisory firm Glass, Lewis & Co. has recommended that MEG shareholders support a proposed cash-and-stock takeover by Cenovus Energy Inc. (TSX: CVE). This marks the second major independent proxy advisor to recommend backing the Cenovus bid, following a similar recommendation from Institutional Shareholder Services.

The Cenovus proposal is competing with an all-stock bid from Strathcona Resources Ltd., and MEG shareholders must approve the deal with a two-thirds majority vote at a meeting expected on Oct. 9. Strathcona, which holds a significant stake in MEG, has indicated it intends to vote its 14.2 per cent position against the Cenovus offer.

The candidates involved operate side-by-side oilsands assets around Christina Lake, south of Fort McMurray, Alta., making consolidation in the region a strategic consideration for all parties.

Stella-Jones signs deal to buy Brooks Manufacturing for US$140 million

Stella-Jones Inc. (TSX: SJ), a major supplier of treated wood and steel products for utilities and infrastructure, has agreed to acquire U.S.-based Brooks Manufacturing Co. for US$140 million. Brooks manufactures treated wood distribution crossarms and transmission framing components and operates a facility in Bellingham, Washington.

Stella-Jones chief executive Eric Vachon described the acquisition as a natural fit that broadens the company’s product offering and strengthens its ability to meet utility customers’ needs. Brooks’ reported sales for 2024 were about US$84 million, and Stella-Jones expects the business to provide additional growth opportunities.

RBC Capital Markets analyst James McGarragle called the purchase a strategically positive move, saying it diversifies Stella-Jones’ product mix and leverages Brooks’ established brand and customer relationships. The deal remains subject to customary closing conditions, including U.S. regulatory approvals, and is expected to close by year-end.

The Brooks acquisition follows Stella-Jones’ recent purchase of Locweld Inc., a manufacturer of lattice towers and steel poles based in Candiac, Quebec. Stella-Jones supplies both treated wood and steel poles, lattice towers, and treated wood railway ties and timbers, as well as residential lumber products.

Algoma guidance for Q3 shows expected loss, lower steel shipments

Algoma Steel Group Inc. (TSX: ASTL) provided guidance indicating it expects an adjusted loss before deductions of approximately $80 million to $90 million for the third quarter. The Sault Ste. Marie-based steelmaker forecasts third-quarter steel shipments between 415,000 and 420,000 net tons, down substantially from the prior-year quarter.

For the comparable quarter last year, Algoma reported adjusted EBITDA of $3.5 million and shipped about 520,443 net tons. The company said U.S. tariffs have effectively restricted its access to key export markets, and persistent global steel overcapacity has pressured demand and margins.

To help navigate the trade disruption and refocus supply to the domestic market, Algoma announced it secured $500 million in loans from federal and provincial sources. The company also noted a recent board resignation from director David Sgro for personal reasons.

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