Thursday 2nd February 2017
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New Zealand shares fell, with Fletcher Building and Freightways dropping, while A2 Milk Co gained on news a competitor may be taken over at a premium.
The S&P/NZX50 Index dipped 1.96 points, or 0.03 percent, to 7.035.54. Within the index, 21 stocks fell, 19 rose and 10 were unchanged. Turnover was $108.3 million.
Fletcher Building led the index lower, down 1.8 percent to $10.14, while Freightways dropped 1.7 percent to $6.87 and Meridian Energy declined 1.7 percent to $2.665.
A2 Milk Co was the best performer on the index, up 2.7 percent to $2.29. UK consumer giant Reckitt Benckiser is in talks to buy Mead Johnson Nutrition, the US-based baby-food maker, for US$90 per share, nearly a 30 percent premium. The negotiations value Mead Johnson's entire share capital at approximately US$16.7 billion, according to Reuters.
"It had a strong day based on the Mead takeover bid for one of their peers, that's certainly helped the performance today," said James Lindsay at Nikko Asset Management. "There's a couple of dynamics there. The volatility in the market, their peers in Australia have had trouble and Comvita as well, that secondary or grey market into China has been fraught with difficulties over the last few months. A2 has been well-supported out of Australia, their ownership levels are quite high there. They're owned a lot by retail investors and they seem to be a lot more quick with their ins an outs, it's a bit of a trading stock for some of those people so that adds to the volatility in that name."
Sky Network Television dipped 0.4 percent to $4.55. US fund manager BlackRock has cut its holding of Sky to 9.3 percent, from the 10.3 percent previously held.
"That didn't assist the price, with people still waiting for their likely poorer result and for the ComCom decision on the Vodafone merger, that's probably more weighing on them," Lindsay said.
Fonterra Shareholders Fund units were unchanged at $6.19. The dairy cooperative's chief executive Theo Spierings told institutional investors at a briefing that it remains on track to meet its 2025 target to process 30 billion litres of milk from five to six milk pools, generating $35 billion in revenue as it pursues a strategy to process more higher value products.
Outside the benchmark index, Veritas Investments spiked 60 percent to 24 cents. It has sold its Nosh food supermarkets to Gosh Holding for $3.98 million, with the transaction due to be completed on Feb. 10. The net sale proceeds after post completion adjustments will be used to repay Veritas group’s bank debt to ANZ Bank New Zealand.
Opus International Consultants dropped 2.1 percent to 93 cents. The engineering firm posted a $29.9 million loss on impairments against its Canadian oil and gas business, with revenue dropping 6.8 percent to $470.9 million.
Abano Healthcare was unchanged at $9. The board has reiterated its recommendation that shareholders reject a takeover offer from its biggest shareholder, saying it had gained no traction and the share price would drop if it was successful.
Briscoe Group was unchanged at $4.08. Managing director and majority shareholder Rod Duke said profit rose about 25 percent to $59 million in the year ended Jan. 29 as the household and sporting goods retailer resisted discounting to protect its gross margins.
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