Hirequip hunted or hunter?

By Nick Stride

Friday 21st May 2004

Hirequip shares rose a further 5c on Wednesday on the announcement of a significant acquisition and, possibly, on speculation the company is itself a takeover target.

Hirequip paid $11.3 million for Power Hire, the country's largest generator hire company.

First New Zealand Capital welcomed "a very solid acquisition," saying it would add a further $6.5 million of annual revenue.

The sharebroker upgraded its earnings forecasts for the current year and the next two.

Analyst Dwane Clark said there were a number of acquisition opportunities available to Hirequip but these were beginning to be fully reflected in the price. It was possible the share price was also reflecting a takeover premium as speculation increased on a move by Australia's Coates Hire into the local market.

A takeover offer from Coates would need to secure the 27% stake held by managing director Stuart McKinlay.

ABN Amro says there are few potential acquisitions of scale remaining in New Zealand.

It says the acquisition of a significant local competitor by Coates could prove a competitive threat.

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Hirequip ­ hunted or hunter?

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