Comvita to enter S&P/NZX 50 if Diligent takeover proceeds; shares jump 4%

Comvita, the natural health products company,  is to enter the S&P/NZX 50 Index if the takeover of Diligent Corp by Insight Venture Partners goes ahead.

S&P Dow Jones Indices says Diligent will be removed from the benchmark subject to shareholder approval of the company's sale. Trading in Diligent shares is due to be halted on April 11, two days before a special meeting of stockholders is to be held at 10am on April 13. If the sale goes ahead it will be delisted. If the sale doesn't complete then trading in Diligent will resume. 

Comvita chairman Neil Craig welcomed the company's proposed ascension to the benchmark. “S&P/NZX 50 Index inclusion is another positive step forward for Comvita on our journey to becoming a truly global, natural health products company," he said. "Recently, we affirmed our strategic plan to deliver $400m of revenue by 2020, and index inclusion will increase our relevancy to New Zealand and offshore investors.”

“We welcome new shareholders who share our vision of realising Comvita’s potential in delivering naturally sourced health products to the world. Index inclusion is also rewarding for our existing, very loyal shareholder base who have supported Comvita over many years. We look forward to further opportunities to grow value for them.”

In its most recent published results, Comvita reported a profit of $3 million on sales of $91.1 million for the six months ended Sept. 30, 2015. 

Shares in Comvita rose 4.1% to $10.50 and have gained 20% since the start of the year. 

(BusinessDesk)

Mr Maurice Greenough  of Equity Investment Advisers  said  “ We have been a strong supporter of this stock. It has had excellent  performance over the past 3 years. Based on current trading data and now the inclusion in the S&P /NZX50  our view is Comvita should continue to outperform ".

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