MARKET CLOSE: NZ shares mixed; Restaurant Brands soars on takeover talk

Thursday 18th October 2018

New Zealand shares were mixed as a dip by blue-chips Spark New Zealand, A2 Milk and Contact Energy took the sheen off Restaurant Brands New Zealand's double-digit spike on a takeover bid.

The S&P/NZX 50 index decreased 1.2 points, or 0.01 percent, to 8,910.59. Within the index, 21 stocks gained, 18 fell and 11 were unchanged. Turnover was $108.8 million, of which Restaurant Brands accounted for $17.4 million.

The fast-food operator was the biggest mover on the day, climbing 14 percent to a record close of $8.67 on almost 10 times the average volume. The company received an indicative offer from Mexico's Finaccess Capital to buy three-quarters of the business at $9.45 a share.

"It's about 30 percent above where we see Restaurant Brands, but it's a good quality business and you'd expect anyone to look at it," said Peter McIntyre, an investment advisor at Craigs Investment Partners.

"It goes to show if there's a quality business in our markets - and there are fewer listed by the day - then there's going to be an approach by a serious investor."

Restaurant Brands underpinned a positive market for most of the day, with New Zealand and Australia outperforming Asia. However, declines in some of the NZX 50's larger companies saw a late turn on the index.

Spark fell 0.5 percent to $3.88 on bigger than normal volumes after pay-TV operator Sky Network Television talked up its production and distribution advantage over broadband broadcasters in premium sports. Sky shares rose 2.3 percent to $2.25.

McIntyre said Sky TV's depressed share price makes it vulnerable to a takeover, and that its ability to service the entire nation through satellite could be an advantage.

A2 gave up some of yesterday's gain, falling 1.7 percent to $10.41. Contact declined 1.8 percent to $5.63 after releasing its latest operating statistics. Like other generator-retailers, it's contending with low hydro storage and high wholesale prices.

Meridian Energy rose 0.8 percent to $3.135 with 1.8 million shares changing changes, while Mercury NZ was unchanged at $3.34 on a volume of one million shares. Genesis Energy slipped 0.4 percent to $2.45 on light volumes after saying it's buying coal and gas on the wholesale market ahead of expected coal imports in December.

Port of Tauranga rose 3.6 percent to $5.12 on light volues after predicting earnings growth at its annual meeting yesterday. Fletcher Building rose 2 percent to $6.23.

Z Energy fell 4.1 percent to $6.35, the lowest since March 2016, on half its average volume. The transport fuels company yesterday reported lower retail petrol volumes in the September quarter. It may come under increased scrutiny from the government, which is fast-tracking legislation to give market studies powers to the Commerce Commission.

Synlait Milk fell 2.5 percent to $9.60 on very light volumes. Ryman Healthcare was down 2.4 percent to $12.48

Metlifecare slipped 0.2 percent to $6. Chair Kim Ellis told shareholders the board is considering ways to reduce the stock's discount to net asset backing, including a potential buyback.

Comvita rose 1.3 percent to $6.08 on very light volumes after shareholders were told the new strategy should lead to higher sales and earnings in the current financial year.

(BusinessDesk)

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