NZ sharemarket up nearly 1% amid ongoing takeover drama

The S&P/NZX 50 Index climbed at lunchtime and closed on 12,425.58, up 115.67 points or 0.94%.

The index last reached those levels in early February 2022. There were 96 gainers and 33 decliners over the whole market on heavy volumes of 115.19 million share transactions worth $239.9m.

Retirement village operator Arvida Group, unchanged at $1.61, again dominated the trading on 71.78m shares worth $115.55m after receiving a takeover offer from New York investment firm Stonepeak at $1.70 a share. 

The Arvida board unanimously supports the bid.

The Warehouse Group, down 4c or 2.76% to $1.41, has received a non-binding proposal from Australian private equity firm Adamantem Capital Management to buy all its shares for between $1.50 and $1.70 a share. The offer values The Warehouse at $520.2m-$589.6m. 

Founder Sir Stephen Tindall and his foundation, which owns 48.7% of the total, support the scheme of arrangement and will remain invested in the company. The Warehouse said the proposal is incomplete and conditional, and there is no certainty that any transaction will occur.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said the takeover offers were a testament to the value available in the market.

 “The worm has turned, and investor sentiment is looking up,” he said. “Private equity bids take a while to surface, and they have pulled the trigger on where they see the market in 18 months’ time. 

“The market has been under-valued for some time, and everyone has been waiting for signals of interest rate cuts. The retail sector, for instance, has been struggling, and there’s a view that it may be bottoming.”

Sullivan said there was still a lot of water to go under the bridge with The Warehouse bid as the directors weren’t onside. 

“Once the experts have a look at the bid, there could be an increased offer. Still, The Warehouse share price was only $1.05 last Friday.”

Arvida and The Warehouse are in the NZX top 50; if the takeovers go through, two more stocks will need to be added.

Local market

The retirement and retail sectors were again buoyant following the takeover offers. Oceania Healthcare rose 6c or 8.45% to 77c; Summerset Group added 28c or 2.64% to $10.88; Ryman Healthcare was up 5c to $4.51; Hallenstein Glasson gained 9c to $5.59; and KMD Brands increased 2c or 4.76% to 44c.

Market leader Fisher and Paykel Healthcare rose 80c or 2.51% to a 32-month high of $32.65; a2 Milk gained 9c to $7.61; Gentrack increased 25c or 2.38% to a new high of $10.75; Mainfreight was up 82c to $75.40; and Freightways collected 7c to $8.83.

Insurer Tower continued its strong run, increasing 4c or 4.02% to $1.035 and rising from 61c on February 12. 

Leading banking groups ANZ added 65c or 2% to $33.15, and Westpac was up 50c to $31.60.  

Other gainers were Eroad increasing 4c or 3.08% to $1.34; Tourism Holdings up 5c or 2.3% to $2.22; ikeGPS rising 7.5c or 15.79% to 55c after a strong quarterly update; and Restaurant Brands improving 12c or 3.75% to $3.32.

Seafood exporter Sanford was up 10c or 2.46% to $4.17; Serko added 6c to $3.88; Steel & Tube increased 2c or 2.17% to 94c; and Radius Residential Care gained 0.004c or 2.04% to 20c.

Precinct was up 3.5c or 2.87% to $1.255 in the property sector, and Property for Industry gained 4c or 1.86% to $2.195.

Fletcher Building, up 4c to $3.36, earlier announced a new independent director, Tony Dragicevich, managing director of Capral, Australia’s largest aluminium extrusion manufacturing and distribution business.

Ventia Services, up 3c to $4.70, has extended its six-year firefighting services contract with the Australian Defence Department, worth $564 m. Ventia has the largest privatised firefighter force in Australia, with 370 people.

Port of Tauranga was down 7c to $5.53; Turners Automotive fell 17c or 3.87% to $4.22; Blackpearl Group decreased 2c or 2.67% to 73c; Being AI declined 0.004c or 9.09% to 4c; and hospitality operator Savor declined 0.007c or 3.59% to 18.8c; 

Colonial Motor Co was down 15c or 2.16% to $6.80 after telling the market that removing tax depreciation on commercial buildings would create a one-off accounting adjustment of $12.7m to the full-year profit. The net profit will not be affected.

Chatham Rock Phosphate, down 0.003c or 2.73% to 10.7c, has completed its offer of 878,000 shares and raised $87,800 to fast-track the Korella North mine development in Queensland and continue the permit process for the Avenir Makatea phosphate project in French Polynesia.