MARKET CLOSE: NZ shares fall as Z Energy drops from record, Infratil declines

Wednesday 3rd June 2015

New Zealand shares fell, with Z Energy declining as investors pocketed yesterday's gains. Infratil, Kathmandu Holdings and DNZ Property Fund dropped after giving up rights to their dividends.

The NZX 50 Index slipped 5.037 points, or 0.1 percent, to 5858.706. Within the index, 25 stocks fell, 18 rose and seven were unchanged. Turnover was $163 million.

Z Energy, the petrol station chain, declined 2.9 percent to $6.02, paring yesterday's 22 percent jump to a record close of $6.20. The chain, of which Infratil owns 20 percent, announced the acquisition of Caltex and Challenge! brands from Chevron in a $785 million deal announced Tuesday morning after details leaked to the Australian market late on Friday. The deal is expected to be "earnings-accretive" from day one, adding 34 percent to earnings per share before counting anticipated synergy benefits of between $15 million and $25 million a year starting in 2017, but still needs to be approved by the Commerce Commission.

"After yesterday's big improvement we've seen some profit-taking come in," said Grant Williamson, director at Hamilton Hindin Greene. "There are one or two concerns starting to emerge about what the Commerce Commission might think about the transaction, so that's creating a little bit of selling in the stock, but it's well above where it was before the announcement was made."

Infratil, the infrastructure investor, led the benchmark index lower, down 4 percent, or 13.5 cents, to $3.27. The stock advanced on Z Energy's news yesterday, but today shed rights to its 6.4 cents per share special dividend, and its 8 cps final dividend.

Kathmandu Holdings, the outdoor goods retailer, declined 0.7 percent, or 1 cent, to $1.38, as it shed rights to its 3 cps interim dividend. DNZ Property Group slipped 1 percent, or 2 cents, to $2.07, as it gave up rights to its 3.125 cps final dividend.

Vector was the best performer on the benchmark index, up 2.5 percent to $3.23. The Auckland gas and electricity distribution company has hired Goldman Sachs to review its gas lines business after an unnamed party expressed interest in buying its gas transmission businesses.

"If there is any liquidation of assets that could be a possible return to shareholders," Williamson said. "Investors have taken that positively, but it's pretty early days."

Fletcher Building, the building supplies and construction firm, fell 2 percent to $8.45. Sky Network Television, New Zealand's dominant pay-television provider, advanced 1.1 percent to $6.37.

Spark New Zealand, formerly Telecom Corp, advanced for a fourth day, up 1.2 percent to $2.89.

BusinessDesk.co.nz

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