Sharechat Logo

Milford snaps up 5 percent of Mercer after Hubbard manager sells out

Thursday 23rd January 2014

Text too small?

Milford Asset Management has spent $2.3 million buying into Mercer Group from the stake once-owned by deceased Timaru businessman Allan Hubbard, building a 5.2 percent stake in the stainless steel producer.

The Mercer shares were part of the assets disputed between Hubbard's widow, Jean, and the statutory managers of the various Hubbard entities, which was eventually settled last year. The administration sold 31.1 million shares on market at 16 cents apiece, according to substantial shareholder notices filed to the stock exchange. Milford bought 14.3 million of those shares.

"We had the opportunity with the the Hubbard asset management fund sell down to get in there and get some volume," Brooke Bone, senior analyst with Milford Asset Management said.

Bone said it was a growth stock and Milford has put 3.37 percent of the stock into their KiwiSaver Milford Active Growth Wholesale Fund, with the remaining 1.81 percent going to the PIE fund, Milford Dynamic Wholesale.

Mercer hired former senior Fairfax New Zealand and PMP executive Rodger Sheppard to head the company in 2011 after a strategic review of the business opened the door for former CEO Howard Milliner to leave.

"The company has been substantially restructured over the last few years," Bone said. "We met the new CEO and were quite impressed with the tailwinds behind it."

The company had a series of setbacks thanks to the global financial crisis in 2008, when it was caught out with too much debt on its books and halted repayments to South Canterbury Finance, when Hubbard was a cornerstone shareholder, after breaching its banking covenant.

This week's shareholder notices show that debt was satisfied by the transfer of 6.3 million shares to Crown Asset Management Ltd, the entity established to wind up the affairs of failed finance companies that drew on the government's retail deposit guarantee scheme, including Hubbard's SFC.

Shares in Mercer fell 4 percent, to 24 cents, and have climbed 56 percent this month.

 

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report