MARKET CLOSE: NZ share fall as UAG pulls Farming Systems offer

Friday 27th August 2010

New Zealand shares fell for the second time in three sessions, on news that one of the bidders for NZ Farming Systems Uruguay had withdrawn its bid, taking the steam out of a potential bidding war with Olam International.

The NZX 50 fell 10.8 points, or 0.4%, to 3007.4. Within the index, 26 stocks fell, nine rose and 15 were unchanged. Turnover on the day was $107. 8 million.

Farming Systems (NZX: NZS ) fell 4.2% to 69 cents, 1 cent below the offer from Olam International, after rival bidder Union Agricultural Group took its 60 cents a share offer off the table, saying "the opportunity does not look so good for us at that price."

“There is still talk that there is a third-party investor out there looking to take a cornerstone stake in the business,” said Karl Willscroft, a trader at Direct Broking. “However the view from the market seems to be that the price won’t go much higher.”

Pyne Gould (NZX: PGC ) fell 4.8% to 40 cents, pacing decliners on the day. Michael Hill (NZX: MHI ) fell 4.4% to 66 cents, and investment holding company Guinness Peat Group (NZX: GPG ) fell 3% to 63 cents.

Fletcher Building (NZX: FBU ) fell 0.1% to $7.52 after the company said it was restructuring its self-funding vehicle into an investment company with a 20% stake in its New Zealand subsidiaries.

Recent changes to the Reserve Bank Act, which regards Fletcher Building Finance as a non-bank deposit taker, mean that it is no longer efficient for the unit to act as the preferred funding vehicle for the group, the company said.

The finance unit currently borrows money from the public in the form of unsecured, subordinated notes, and then lends to various entities within the Fletcher group.

Fisher & Paykel Healthcare (NZX: FPH ) fell 0.7% to $2.81. The company is projecting 10% annual net profit growth in constant currency terms, chief executive Mike Daniell told shareholders at the annual meeting in Auckland.

Northland Port (NZX: NPC ) was unchanged at $1.70 after the company reported a 16% rise in net profit for the year to June 30, at $3.1 million, or 7.59 cents a share, up from $2.7 million, 6.3 cents per share, in the previous period. Operating revenue for the year came in at $5.2 million, up from $4.5 million.

South Canterbury Finance had its securities halted from trading on the NZX debt market pending an announcement on a new investor. "We are close to an arrangement with new investors, and we're just putting a halt in place while the arrangements are finalised," said John Draper, a spokesman for the company.

The announcement comes after the statutory managers for South Canterbury's owner Allan Hubbard said Hubbard's Aorangi Securities Ltd has too much exposure to the dairy sector, leaving "significant risks" for investors, while Hubbard Funds Management is over-valued by at least 25%.

Property stocks closed the week on a positive note. AMP Office Trust, the property investor, rose 2.9% to 72 cents, pacing gainers on the day.

ING Property Trust (NZX: ING ) rose 1.5% to 69 cents, Goodman Property Trust (NZX: GPT ) rose 1.1% to 94 cents and Property for Industry (NZX: PFI ) rose 0.9% to $1.13.

Casino and hotel operator Sky City (NZX: SKC ) rose 1% $2.91. The stock was highly active on the exchange today with 1.1% of total shares changing hands. This accounted for almost 20% of the turnover on the bourse.

Vector (NZX: VCT ) rose 1.9% to $2.12. The company reported steady earnings in the year to June 30, with underlying net profit up 4.3% to $172.6 million on a revenue increase of 1.1% to $1.19 billion. Earnings before interest, tax, depreciation and amortisation fell 1% to $578.1 million.

Directors announced a 0.25 cent per share increase in final dividend to 7.5 cents, bringing total distributions for the year to 14 cents, fully imputed, with the final dividend payable on September 13.

State-owned coal miner Solid Energy bounced back strongly in the second half of the year to June 30, recording a tax-paid profit for the year of $67.8 million.

The full-year profit was down 39% on the previous year owing largely to weak international prices and prolonged industrial action, which pushed Solid Energy to a $6.5 million loss in the first six months of the trading period under review.

Air New Zealand (NZX: AIR ) rose 1.6% to $1.28, Kathmandu (NZX: KMD ) rose 1.3% to $1.60.

Delegat Group, the maker of Oyster Bay wines, rose 1.9% to $1.63 after it reported a 99% slump in profit after it wrote down the value of its vines and grapes by $11.8 million. Net profit was $177,000, compared to $30 million a year earlier.

Businesswire.co.nz

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