Shares dip as Fletcher drops Steel bid
New Zealand shares dipped, outperforming many Asian markets, as Fletcher Building aborted its pursuit of Steel & Tube Holdings after its increased offer wasn’t warmly embraced by the target.
The S&P/NZX 50 index declined 5.17 points, or 0.1 per cent, to 8838.07. Within the index, 26 stocks fell, 19 gained and five were unchanged. Turnover was $132.8 million.
Fletcher fell 0.8 per cent to $6.10 in busier activity than usual, with 4.6 million shares traded. The country’s biggest listed building company gave up plans to buy Steel & Tube when the steel products maker wouldn’t immediately endorse an increased offer of $1.90 per share, plus scope for the smaller firm to pay a 5 cents per share special dividend.
Steel & Tube stock jumped as high as $1.73 after announcing the increased offer, before closing down 1.3 per cent to $1.48. Some 1.2 million shares were traded — more than five times the stock’s 90-day average.
“It was a pretty quick turnaround there. The few shareholders who traded in that hour or two will be a little bit annoyed,” said Grant Davies, an investment adviser at Hamilton Hindin Greene. “Now it’s up to Steel & Tube to show they’ve made the right call in rebuffing Fletcher.”
Stock markets across Asia were largely weaker, with Australia’s S&P/ ASX 200 index down 0.9 per cent in afternoon trading, Hong Kong’s Hang Seng down 1 per cent and China’s Shanghai Composite index falling 0.8 per cent. Davies said US President Donald Trump’s warning against Saudi Arabia over the disappearance of a journalist in Turkey raised uncertainty for global investors.
A2 Milk fell 1.1 per cent to $9.78 on volumes of 1.1 million, weighing on the broader market. Synlait Milk,
which supplies A2, fell 2.1 per cent to $9.20
Property companies were also among the most traded stocks. Precinct Properties New Zealand fell 0.4 per cent to $1.41 with 1.2 million shares changing hands; Goodman
Property Trust fell 1.3 per cent to $1.52 on volumes of one million shares, and Kiwi Property Group was unchanged at $1.35 with 1.6 million shares traded.
Kathmandu Holdings led the market lower, down 2.3 per cent to $2.92 on volumes of 721,000 — more than four times its 90-day average.
Spark New Zealand gained 0.9 per cent to $3.895 on volumes of 3.3 million shares. Ryman Healthcare rose 2.4 per cent to $12.80 with 1.2 million shares traded.
Comvita posted the biggest gain on very light volumes, up 2.6 per cent to $6. Sky Network Television was up 2.4 per cent to $2.12 in subdued trading ahead of its annual meeting on Thursday. Heartland Bank rose 1.2 per cent to $1.65 after telling the Australian Financial Review it’s increased its share of Australia’s reverse mortgage market to 20 per cent.
Trustpower increased 0.7 per cent to $6.12 after raising March-year earnings guidance by $10m to $215m to $235m. Infratil, which owns a controlling stake in Trustpower, slipped 0.1 per cent to $3.46.
NZX was unchanged at $1.05 on average volumes. Salt Funds Management said it plans to list a carbon fund on the NZX next month. Outside the benchmark index,
Michael Hill International sank 24 per cent to 74 cents in heavy trading after reporting an 8.8 per cent slide in first-quarter sales. The jewellery chain said it had underestimated how much it needs to spend on marketing since ditching a discount strategy.
Pacific Edge jumped 17 per cent to 38.5 cents, adding to its 14 per cent gain on Friday. The bladder cancer test maker said Johns Hopkins Medicine has started evaluating the company’s Cxbladder test.