Market commentary

WELLINGTON: New Zealand shares rose, led by Metlifecare after the retirement village operator received a new takeover offer from its onagain, offagain suitor, EQT.

The S&P/NZX 50 Index advanced 97.51 points, or 0.8%, to 11,656.21. Within the index, 34 stocks rose, 8 fell, and eight were unchanged. Turnover was $111 million.

Metlifecare led the benchmark higher, jumping 10.3% to $5.76 after Swedish investor EQT made a new takeover bid at $6.00, a dollar less than the original offer but $1.78 more than Friday’s closing price of $5.22.

EQT’s Asia Pacific Village Group was trying to back out of the deal and faced protracted litigation if Metlifecare shareholders voted to proceed with a claim at a special meeting this week.

That’s now been deferred, and Metlifecare’s board will resume talks with EQT after receiving a new offer yesterday. Chairman Kim Ellis said its largest single shareholder, the New Zealand Superannuation Fund at 19.9%, was supportive of the new offer.

‘‘The fact that EQT has come back to the table suggests there is some recognition that the sector remains attractive in terms of longerterm growth,’’ said Shane Solly, a portfolio manager at Harbour Asset Management.

Other retirement stocks also rallied on the day with the vote of confidence in Metlifecare reminding investors that retirement operators came out of lockdown relatively strongly, he said.

Oceania Healthcare rose 3.3% to 94c, Summerset Group advanced 2.7% to $6.77, Ryman Healthcare gained 1.5% at $13.10

Trading was generally quiet with an ‘‘information vacuum’’ as investors waited to see another tranche of domestic results from the June period and from the US reporting season.

‘‘We are in this period of time where there is a bit of a gap in information, but there is certainly plenty of capital sitting on the sidelines waiting,’’ Mr Solly said.

Some large firms also gained as investors reallocated their portfolios at the start of the quarter.

Contact Energy rose 2.7% to $6.88, Meridian Energy advanced 2.6% to $5.07 and Fletcher Building gained 2.3% to $3.59.

Fisher & Paykel Healthcare rose 1.9% to $35.15, while A2 Milk fell 1.1% to $20.90 having gained 8.7% across last week.

Retailer Kathmandu Holdings rose 2.5% to $1.23. Solly said investors were continuing to digest the group’s ‘‘ripper result’’ last week which saw the share price run up and then gave a little bit back. The stock is up 8.9% this month.

Auckland International Airport dropped 1.4% to $6.39 and Air New Zealand fell 0.3% to $1.455. The spike of new Covid19 cases in the Australian state of Victoria has put the brakes on the prospect of a full transtasman bubble, Mr Solly said

Z Energy posted the day’s biggest decline, dropping 2.5% to $2.74.

Outside the benchmark index, cancer diagnostics company Pacific Edge continued to rally, gaining 5.5% at 58c.

On Friday, the company announced its Cxbladder cancer test had been approved for use by the US Centres for Medicare and Medicaid Services which will bring in considerable amounts of revenue.

‘‘The company can potentially keep supporting its growth from that cash flow,’’ Mr Solly said. — BusinessDesk