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MARKET CLOSE: NZ stocks rise as Nuplex, Diligent soar on takeover offers

Monday 15th February 2016

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New Zealand stocks rose as Nuplex Industries and Diligent Corp soared following takeover offers, after more positive global leads.

The S&P/NZX 50 Index advanced 100.3 points, or 1.7 percent, to 6034.29. Within the index, 34 stocks rose, nine fell and seven were unchanged. Turnover was $107 million.

Nuplex led the index, up 30 percent to $5, an eight-year high. The stock had closed at $3.86 on Friday, prior to this morning's announcement that Allnex Belgium SA has proposed buying the company via a scheme of arrangement at a 44 percent premium to the New Zealand company's recent trading price, to create one of the world's largest makers of coating resins.

Allnex, which is controlled by Boston-based private equity firm Advent International, would offer $5.55 a share for Nuplex, valuing the target at $1.05 billion. The proposal is indicative, non-binding and conditional. Nuplex shares climbed about 30 percent in the past year, prior to today. The stock is rated a 'buy' based on the consensus of five analysts polled by Reuters.

Diligent shares also soared, up 27 percent to $7.14, a price not seen since June 2013, after news it's being acquired by venture capital firm Insight Venture Partners in a deal that values the governance software developer at $941 million.

Under the terms of the agreement, Diligent shareholders will receive $7.39 (US$4.90) in cash per share, which is a 31 percent premium to the closing share price on Friday of $5.64, the company said in a statement to the NZX. The Diligent board has unanimously approved the transaction and recommends shareholders vote in favour of the agreement

"Certainly having a bit of merger and acquisition activity has put a bit more confidence in the New Zealand market," said Shane Solly, portfolio manager at Harbour Asset Management, which owns 10.7 percent of Diligent. "It recognises some value within the New Zealand market, and if these stocks are taken over, there may be cash to reinvest in the rest of the market."

Sky Network Television rose 6.2 percent to $4.49, A2 Milk Co advanced 5.1 percent to $1.84, and Meridian Energy gained 3.4 percent to $2.315. 

Stocks across Asia mostly traded higher this afternoon, with the exception of Chinese markets, with the large-cap CSI 300 falling 1.4 percent which is less than expected in its first session since Feb. 5 after a week of volatile global swings. Hong Kong's Hang Seng rose 2.7 percent and Australia's S&P/ASX 200 gained 1.3 percent at 5:20 New Zealand time.

"We got a slightly better lead offshore on Friday, the United States was a bit firmer and today we've seen the Chinese market come back in from holiday and not be as weak as people had presumed they would be," Solly said. "Approximately 1 percent is not too bad, relative to what people expected they would be for China."

Australia and New Zealand Banking Group grew 3 percent to $24.42, and Skellerup Holdings rose 2.9 percent to $1.40. 

Contact Energy rose 0.9 percent to $4.42. The electricity generator and retailer will pay an unchanged 11 cents per share interim dividend thanks to a 24 percent improvement in free cash flow, despite turning to a first-half loss of $116 million, mainly due to impairments to the value of its shuttered Otahuhu-B power station.

Coats Group fell 2.1 percent to 47 cents, while Infratil dropped 1.9 percent to $3.03 and Port of Tauranga declined 1.4 percent to $17.85. 

Property For Industry fell 0.3 percent to $1.615. The listed industrial property investor increased annual profit 21 percent with an uplift in the value of investment properties strengthening the balance sheet. Net profit rose to $72.8 million, or 17.25 cents per share, in the 12 months ended Dec. 31, from $59.9 million, or 14.55 cents, a year earlier, the Auckland-based company said in a statement. Operating revenue rose 4.9 percent to $66.9 million.

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