National Post from Toronto, Ontario, Canada • 44

CANADA FINANCIAL POST, THURSDAY, APRIL 29, 1999 Finale to show's topsy-turvey season offers plenty of surprises Episode 422: This World Then the Fireworks. Why watch Season finale. Why watch II: Leafs aren't on tonight and the Oilers and Senators are out. Why watch III: Adam Cunningham: Most Potent Man on Bay Street and we're not talking return on equity. Best line: 'Let's see what the frat boys do: shake hands or stab each other in the back" Alpha geekhacker Lewis, played with healthy relish by Daniel Mclvor, as he prepares to foul up Bay Street's computerized stock trading system.

What happens: Traders' producers have yet to line up the WHAT'S ON TRADERS ing courted by Cancorp, the sworn enemy of GRC, to replace the late David Astin as head of the bank. AH we can say about that effort is that Adam's in for a big shock at Cancorp. He's in for a bigger shock, though, from his new sweetheart, Catherine. Sally isn't any help either, being too busy finding new uses for her desk with the help of her boyfriend Daniel. Lost among all the confusion is Marty who celebrates his 40th birthday with rival McGraff (played by none other than Count Floyd himself, Joe Flaherty) and promptly announces he's quitting the brokerage business.

Say it ain't so! DavidAkin, Financial Post financing for another season so this could be the final episode. At the very least, it's the finale to a topsy-turvey season and there's plenty of surprises, including the appearance of two of Canada's top playwrights, Daniel Mclvor and Ned Vukovic in support ing misleading trade data into Bay Street's computers. (Come to think of it, with the way the TSE's computers are running these days, this doesn't sound like much of a challenge). Jan-sky, under the pressure to join The Revenge of the Nerds: TNG" is torn ing roles. Mclvor plays Lewis, an old friend of Jansky's and the leader of a group that promises to follow through on a vow from their col- between his old friends and their youthful ideals, and his loyalty to his investment bank colleagues.

None of the higher-ups at Gard- lege days to crash Canada's trading floors by post- nerRoss is paying too much attention. Adam is be Cautious Stelco adopts poison pill Teck Corp to spin off gold division MOVE MAYTAKE YEARS $320-million of additional capital investment projects beginning this year, to be completed by the if 'in KIM STALLKNECHT NATIONAL POST Norman Kcevil, Teck president, at the company's annual meeting in Vancouver yesterday. BREATHING SPACE Steelmaker sees consolidation as a staple of the industry -sBy David Steinhart Stelco Inc. has put shareholder rights plan into play to protect itself against a hostile takeover, the company's president and chief executive said yesterday. Speaking at Stelco's annual meeting in Toronto, James Al-fantt said the Hamilton, Ont-based steel producer sees Canadian steel industry consolidation as a staple for many years to come.

To that end, he said the company will take a long, hard look at any takeover proposal, although none is on the table. "At this point, we'd look at it very seriously because we're a mid-size player who is somewhat limited from taking the offensive in any merger talk," Mr. Alfano said. "Our adopted plan gives us an extension to 60 days from 21 to ponder a bid." The poison pill which can take several forms makes sudden takeovers a lot more expensive by allowing company directors to put an increased number of shares into the market if they don't approve a hostile bid. Meanwhile, Mr.

Alfano announced plans to proceed with Air Canada forges alliance with Mexicana CODE-SHARING MONTREAL Air Canada and Mexicana de Aviacion announced 'an alliance yesterday that they say will improve service for ajr travellers between Canada and Latin America. The agreement offers customers frequent flyer benefits, one-stop check-in, schedule co-ordination and code-share flights to a variety of destinations. The new service will compete with Canadian Airlines, which already offers daily non-stop flights between Toronto and Mexico City. Mexicana has regular non-stop flights three times a week between Toronto and Mexico City and between Montreal and Mexico City. Starting June 2, travellers on those flights will be able to buy Brookf ield posts 21 gain in cash flow for first quarter second quarter of 2000.

Stelco will invest $48-million at its Hilton Works division to upgrade a cold-rolling mill and about $125-million to repair and upgrade a blast furnace. In February, Stelco raised $150-million through an offering of senior unsecured debentures to support upgrades and projects, Mr. Alfano said. Since 1997, the company has invested $464-rnil-lion in facility and technology up-grades. Mr.

Alfano said Stelco hasn't ruled out further trade action if it's warranted, after imports captured 42 of Canadian stee consumption in 1998, up from 37 in 1997. In March, Revenue Canada established preliminary hot-rolled dumping duties against France, Russia, Romania and Slovakia after Stelco and other Canadian steel producers complained the dumping was hurting business. On the automotive front, Mr. Alfano said Stelco is keeping a close eye on companies buying large amounts of aluminum and metals other than steel. But, he said the company is not concerned the North American car giants will start building all-aluminum or all-magnesium automobiles.

"If we do our work, there will be no need for all-aluminum cars but we won't take anything for granted," he said. Financial Post their tickets at Air Canada. Starting in July, the agreement will be extended to Mexicana flights out of Mexico City to and from Guadalajara, Cancun, Aca-pulco and Puerto Vallarta, and to Air Canada-operated flights to and from Winnipeg, Quebec City, Vancouver and Calgary. The two airlines will honour each other's frequent flier programs, and will issue single tickets good on both carriers. For example, a traveller from Winnipeg would buy a single Air Canada ticket and boarding pass to go to Cancun, via Toronto and Mexico City.

Mexicana has already moved its operations from Terminal One to Terminal Two at Toronto's Pearson International Airport, adjacent to Air Canada's operations. Mexicana operates more 300 flights daily to 50 cities in Mexico, the United States and Canada. Like Air Canada, it also has commercial alliances with United Airlines and Lufthansa. Montreal-based Air Canada, together with its regional carriers, operates more than 1,200 scheduled flights daily to more than 120 destinations in the world. The Canhdian Press AEG STRONG MARKETS By Paul Bagnell Strong real estate markets and revenue from new properties drove a 21 gain in first-quarter cash flow at Brookfield Properties the company reported yesterday.

Brookfield executives also said they expect the company's shares to begin trading on the New York Stock Exchange by the end of June. The firm hopes a New York listing will broaden the audience for its stock and help improve share prices. Yesterday, the stock rose sharply, closing at $21.50, up $1.30 from Tuesday, in heavy trading of 678,190 snares. The stock's 52-week high is $23.65 on May 1 last year. Value 'buried' by diversification, analysts believe By John Schreiner VANCOUVER Giving in to the arguments from institutional investors, Norma Keevil Teck president, is preparing to shift the diversified mining company's gold assets into a separate company by the end of the current fiscal year.

Within two years, Mr. Keevil expects that up to 49 of Teck Gold, as the company will be called, will be sold to the public. At the same time, Teck will continue adding to its 40 stake in Cominco Ltd. with the long-term objective of merging it and Teck into a major zinc-copper producer. "Our target is good ore bodies of whatever the commodity," Mr.

Keevil said in an interview after Teck's annual meeting yesterday. But he conceded that "it's not the flavour of the day to be a diversified mining company." During the past year, he said, numerous investment bankers have made various proposals for unlocking more shareholder value in Teck's assets. They argued that "our gold is buried in a diversified company and lacks visibility," Mr. Keevil said "I think they are right" What finally persuaded him to move away from Teck's traditional determination to be a diversified producer was the argument of a New York investment banker that Teck's gold operations have the potential for more internal growth than is true of many comparable gold producers. This year, Teck will produce almost 500,000 ounces of gold, primarily from two 50-owned mines at Hemlo in Ontario and the 100-owned Tarmoola mine in Australia.

In addition, the company is moving toward a feasibility study on another Australian gold property with a resource of 1.2 million ounces. In Alaska, Teck owns 40 and is the operator of exploration on the so-called Pogo deposit where a 5.2 million ounce resource has been drilled. Teck also has other gold exploration properties in Alaska, Mexico and Chile. "It's a different business," Mr. Keevil said of gold, adding that he has a candidate in mind to run the proposed Teck Gold.

The new structure is likely to bring better focus both to exploration and to hedging activities. Mr. Keevil believes the current gold price is as low as it's likely to get but the company continues to wring cost savings from its mines. In Hemlo, the processing plant of the David Bell mine will close in the third quarter when the plant at the nearby Williams mine has been expanded to process ore from both mines. The $2-million capital investment is expected to generate annual savings of $3-million to $4-million.

Mr. Keevil said that a Teck-Com-inco merger is not likely to happen for five or 10 years. It would not make sense today because Cominco has $800-million in debt "At some point, it the Teck ownership of Cominco should be 100," he said. "It's not on the front burner now because it does not work today." David Thompson, Cominco's chief executive, draws his salary ($765,000 plus a $174,400 bonus last year) from Teck, where he is a senior vice-president and director. Cominco reimburses Teck for most of that salary.

In the field, the companies often are strategic partners on major projects, including the (US) An-tamina copper-zinc mine being developed in Peru. Financial Post Pigs in cyberspace LAURAASHLEY SELLING OFF NORTH AMERICAN BUSINESS By Elizabeth Fullerton LONDON British fashion and fabrics retailer Laura Ashley Holdings PLC said yesterday it will sell its money-losing North American business for just $1 (US) to concentrate on Europe and its franchising operation. "The company can now direct its complete focus on improving profitability in the U.K. and Con tinental Europe and expanding our successful franchising and licensing businesses worldwide," said Kwan Cheong Ng, the chief executive. The company reported a loss be fore tax for the year of l6.7-mil-lion compared with 25.5-million the previous year.

The quintessentially British retailer said it was obliged to sell its North American business, in cluding Canadian operation, and find 24.6-million of fresh funding to secure an extension of loan facilities until April 2000. Without this banking facility, the company said "it would not be able to meet its commitments and would not avoid insolvent liquidation." The U.S. business is being sold for a nominal $1 to Laura Ashley (North America), a management buyout team, and of debt is being written off. The disposal followed an earlier attempted sale in which the management team was the only potential buyer to make an offer. Famed for its chintz fabrics and flowing floral dresses, Laura Ashley was an international success story in the 1970s and 1980s but mismanagement and over-expansion sent profits spiralling downward in the 1990s.

The plunge culminated in a 49-million loss in 1997. Last April Malaysian United Industries stepped in to buy 40 of the company and instigated a restructuring program. There has been speculation MUI might want to take the firm private but MUI denied it Commercial services director Stephen Cox said the British look of Laura Ashley was not threatened. He said there was still a long way to go but the North American disposal should put the company back on track. Reuters ALBERTA ENERGY COMPANY Brookfield expects 1999 cash flow to be roughly 20 better than 1998's $290-million, a forecast shared by most analysts.

Toronto-based Brookfield, 52.6 owned by EdperBrascan derives most of its earnings from a portfolio of high-end office buildings in New York, Toronto, Boston, Denver, Minneapolis, and Calgary. For the three months ended March 31, Brookfield had cash flow of $81-million and revenue of $558-million. That was up from cash flow of $67-million and revenue of $454-million in 1998's first quarter. In New York, Brookfield said, commercial rental rates are 20 higher than they were a year ago. The company draws 57 of its net operating income from its New York properties.

Financial Post consolidating two small Canadian firms providing technology that enabled the Ontario Livestock Exchange to conduct such electronic auctions. David Beck, a technology analyst at TD Securities, says e-Auction is one of the "new intermediaries" that aims to set up targeted gateways on the Internet to consolidate market information, allow customers to learn about vendors, products and services within the sector and link buyers to sellers. e-Auction may also go into partnership with reputable livestock auction houses. That would enable it to leverage the reputation of a partner such as the OLE, which has long-established relationships with ranchers and meat packers. Agents from the auction houses would inspect and grade cattle before they are offered for auction.

Livestock assessment data would then be entered into the server operated by e-Auction and an online auction would be scheduled. The server would call up pre-arranged auction lots at the appropriate time and customers could bid in real time. Following bidding, the server would release an auction report, advise vendors about transportation arra ngements and arrange financial settlements. Financial Times Canadian plans to auction livestock via the Internet By Scott Morrison Shane Maine's company is trying to sell cows in cyberspace. If all goes well, e-Auction Global Trading, the Canadian Internet auction firm he heads, plans to sell pigs and sheep as well.

In another innovation in Internet commerce, e-Auction is trying to establish itself in the growing online commodities auctions market, linking businesses electronically to their supply chain. The energy sector accounted for most of the estimated $5-billion (US) worth of commodities traded via Internet auctions in 1998. Technology forecasters such as U.S.-based Forrester Research, see the Internet commodities auction market expanding to as much as $32-billion (US) by 2002. e-Auction believes it can carve out a niche within that market by focusing on the largely low-tech agribusiness sector. Satellite and electronic auctions, conducted over costly, closed networks, have been held in North America for about two decades, e-Auction was founded last year by Ian W.

Delaney Mr. Stanley A. Milner, Chairman, is pleased to announce the election of Ian W. Delaney to the Board of Directors of Alberta Energy Company Ltd. Mr.

Delaney, Chairman of Sherritt International Corporation, also serves on a number of corporate boards. In addition to serving as a Director of MacMillan Bloedel Limited, he is Chairman of both The Westaini Corporation and Corporation. Mr. Delaney is also Director of Co-Steel Inc. and Chairman of Sherritt Power Corporation.

Focused and growing, Alberta Energy Company Ltd. is one of Canada's largest upstream natural gas and oil exploration and production companies. Profitable midstream investments in pipelines, as well as natural gas storage and gas liquids processing, provide an additional solid income base. AEC's current stock market value is approximately billion. Common shares trade on the Toronto and Montreal stock exchanges (AEC) and on the New York Stock Exchange (AOG)..