(The following story by Leonard Zehr appeared on the Globe and Mail website on August 22.)
TORONTO— Sources are telling Scotia Capital that Brookfield Asset Management Inc. may revisit its plan for a leveraged buyout of Canadian Pacific Railway Ltd. next year.
The deal supposedly floundered because LBO financing dried up, but “we believe issues surrounding the apparent decision run a little deeper,” writes analyst James David.
With a seeming end to takeover speculation, he cut CPR’s price target to $81 from $88.50, reflecting fundamental profit estimates. He also kept the stock at “sector perform,” saying he continues to prefer Canadian National Railway Co.
CPR rose $1.42 or 2 per cent to $72.37 on the TSX Wednesday afternoon.