NZ sharemarket down 0.1% amid takeovers

Takeovers were the name of the game on the New Zealand sharemarket, with Arvida Group surging more than 50% and The Warehouse Group not that far behind.

Monday, July 22nd 2024, 6:49PM

by BusinessDesk

The S&P/NZX 50 Index fired up late morning on the two takeover approaches and then had a sharp fall in the end-of-day broker matching session to close at 12,309.91, down 15.7 points or 0.13%.

There were 55 gainers and 83 decliners over the whole market on volumes of 56.52 million share transactions worth $135.84m.

Arvida – the board is unanimously backing a $1.2 billion offer from New York-based infrastructure investment firm Stonepeak – dominated the trading with 18.32m shares worth $29.3m changing hands.

Stonepeak, with US$71.2b assets under management, is offering $1.70 a share for a 100% of Arvida – a 65% premium to the Friday close of $1.03 – and Arvida surged 58c or 56.31% to $1.61.

Arvida said a special meeting will be held in the last quarter of the year to approve the scheme of arrangement, which offers compelling value to shareholders.

The remainder of the downbeaten retirement village sector benefitted from the renewed interest, with Oceania Healthcare increasing 11c or 18.33% to 71c; Ryman Healthcare gaining 31c or 7.47% to $4.46; and Summerset up 15c to $10.60.

Matt Goodson, managing director of Salt Funds Management, said the Arvida offer represented a 17% discount to net tangible assets (NTA), and there was a high likelihood of the takeover being concluded.

“Even though the housing market has been awful, the NTA has ground up. A lot of investors didn’t believe the NTAs because they weren’t accompanied by free cash flow generation. It looks like Stonepeak is picking the bottom in the housing market,” Goodson said.

The Warehouse rose 29c or 25% to $1.45 after telling the market it has had an approach from founder and majority shareholder Sir Stephen Tindall and Sydney-based Adamantem Capital Partners about buying its shares.

The approach did not constitute an offer, and The Warehouse advised shareholders not to sell pending further advice from the directors.

Goodson said The Warehouse share price bounced 10% on Friday on large volumes and it’s up another 25% - “I would hope there might be a stewards’ enquiry.”

He said the takeover activity sparked some speculative buying as investors searched up and down the market to see who might be next, but that’s a difficult game.

Local market

In the retail sector, KMD Brands increased 2.5c or 6.33% to 42c; and Michael Hill gained 2c or 3.17% to 65c.

Fisher and Paykel Healthcare was up 20c to $31.85; Ebos Group added 31c to $35.10; Heartland Group increased 3c or 2.91% to $1.06; Restaurant Brands rose 20c or 6.67% to $3.20; Tower gained a further 4c or 4.19% to 99.5c; Air New Zealand improved 1.5c or 2.7% to 57c; and Napier Port collected 5c or 2.09% to $2.44.

Mainfreight was down $2.490 or 3.12% to $74.58; Mercury Energy declined 16c or 2.26% to $6.905; Port of Tauranga eased 15c or 2.61% to $5.60; Gentrack shed 25c or 2.33% to $10.50; and Stride Property decreased 3c or 2.42% to $1.21.

Sky TV decreased 7c or 2.57% to $2.65; Vista Group was down 7c or 2.86% to $2.38; Skellerup eased 9c or 1.98% to $4.46; AFT Pharmaceuticals shed 7c or 2.3% to $2.98; and Being AI fell 0.009c or 16.98% to 4.4c.

Meridian Energy, down 36c or 5.22% to $6.53, has issued the Tiwai Point aluminium smelter a second demand response notice to reduce electricity usage by a total of 185MW - a third of the operation - from early August and help manage South Island hydro storage levels. Lake storage is near their lowest levels historically.

Contact, up 5c to $8.55, told the market South Island controlled storage was 60% of mean and North Island 63%. Mass market electricity and gas sales in June were 421GWh, down from 430GWh in the same month last year.

SkyCity Entertainment, down 3c or 1.89% to $1.56, told the market that the Internal Affairs temporary suspension notice has been formally withdrawn from the Gambling Commission and it was now liaising on the dates the Auckland casino will be closed for five successive days.

AoFrio, formerly Wellington Drive Technologies, gained 0.007c or 13.21% to 6c after reporting a 41% rise in revenue to $21.8m for the second quarter and a 27% increase to $38.4m for the second half of the 2024 financial year. Operating earnings (ebitda) for the first half were $1.1m, up from a loss of $700,000 in the previous corresponding period.

My Food Bag was down 0.009c or 5.88% to 14.4c. The meal kit company last week recalled sesame seed products across three weeks of delivery because of possible presence of salmonella.

Tags: Market Close