Buy-out offer boosts Metlife share price

News also boosts other aged-care companies

New Zealand shares were led higher by Metlifecare after the retirement village operator said it had attracted a sub-par offer from a credible buyer. The S&P/NZX 50 Index rose 83.25 points, or 0.8 per cent, to 10,975.49. Within the index, 27 stocks rose, 16 fell and seven were unchanged. Turnover was $189.1 million.

Metlifecare jumped 12.8 per cent to $5.73, a 12 month-high, with 576,000 shares traded. That was more than twice its 90-day average of 248,000, and comes a day after an investor bought 3.6 million shares at $5.05 apiece. Metlifecare’s board suspended a $30 million share buyback programme while it engaged with the would-be buyer.

Michael McCarthy, chief market strategist at CMC Markets, said the weaker New Zealand dollar was making assets cheaper for cashed-up overseas buyers, and that the nonbinding nature of the unnamed suitor had the hallmark of private equity.

“From an international point of view, some of these businesses are looking very cheap,” he said. McCarthy said boards need to weigh up highly conditional bids very carefully, because they can be a big drag on a share price. However, “from the market reaction today, there seems to be a consensus view this one’s going ahead.”

Other retirement village and aged care operators were also boosted.

Summerset Group Holdings rose 3.5 per cent to $7.43, Oceania Healthcare was up 2.8 per cent at $1.11 on a volume of 1.4 million shares, Arvida

Group increased 1.9 per cent to $1.61, and Ryman Healthcare increased 1.4 per cent to $14.34.

Other healthcare stocks appeared to similarly enjoy the halo effect, with

Fisher & Paykel Healthcare up 1.4 per cent at $20.78 on a volume of 1.1 million shares, more than twice its average of 440,000. Ebos Group recovered some of yesterday’s decline, up 0.6 per cent to $22.95. Its cornerstone shareholder, the Zuellig

Group, sold down its stake in a block trade yesterday.

A2 Milk rose for a second day, having upgraded its outlook at yesterday’s annual meeting. The stock rose 3.9 per cent to $14.67 on a volume of 1.6 million shares, more than twice its 768,000 average. Synlait Milk, which supplies A2, rose 2.5 per cent to $9.48. Investore Property fell 7.3 per cent to $1.77 after it resumed trading following yesterday’s $65 million placement at $1.75 a share. It also shed rights to a 1.9 cent dividend. Westpac Banking Corp fell 2.6 per cent to $27.41. The Australian bank was accused of breaching laws to prevent money laundering and terrorism financing. Australia & New Zealand Banking Group was also down, falling 0.7 per cent to $26.63.

Power companies were largely weaker, with Meridian Energy down 2.3 per cent at $4.35 on a volume of 3.2 million shares, Contact

Energy fell 1.8 per cent to $6.68 on a volume of 1.8 million, Trustpower fell 1.3 per cent to $7.64 and Genesis Energy declined 1.1 per cent to $3.16.

Spar was the most traded stock on a volume of 5.8 million shares. It rose 0.5 per cent to $4.47. Of other stocks trading on volumes of more than a million shares, Mercury rose 1.1 per cent to $4.77 and Kiwi Property

Group was up 0.3 per cent at $1.55.