Tamsyn Parker 's Opinion

Tamsyn Parker is the NZ Herald's Money Editor

Stock Takes: Good signs on last day of Meridian offer

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Vector is shying away from mainstream media coverage of its annual meeting next week.
Vector is shying away from mainstream media coverage of its annual meeting next week.

Today is the last day in Meridian Energy's public offer and all signs are it could be oversubscribed by retail investors.

There's always a last-minute rush during initial public offers but Stock Takes understands most brokers have more than covered their allocations as well as selling into the public offer.

Retail investors could face some scaling back - a notion that was almost unthinkable at the start of the process.

Meridian joint lead managers are said to have scaled back their meeting schedules with institutional investors because of the demand from retail investors.

The institutional bookbuild is due in the first half of next week with a final price on Wednesday.

If the price is lower than the $1.60 price cap set for retail investors then retail investors may end up paying less.

Some local fund managers say they don't expect the bookbuild price to go above $1.55 but they may not have that much say in the final price setting.

Back of the envelope calculations indicate local institutions may end up getting a smaller percentage of shares in Meridian than they did for Mighty River.

Domestic fund managers got 18 per cent of Mighty River's shares on offer compared with the 55 per cent for retail investors.

The broker pool for Meridian has already potentially soaked up 45 per cent. The public offer would only need to attract about $125 million for retail investors to reach 55 per cent of the total $1.25 billion.

International institutional interest is said to be very strong, leaving domestic institutions the ones most likely to miss out. Final numbers are expected to be announced on Wednesday.

DOWN NOT OUT

Diligent Board Member Services' disappointing new-client figures have been punished on the markets but analysts have taken a mixed reaction to the news.

Diligent shares dropped 14 per cent last Friday and a further 15 per cent on Monday after the boardroom software company said it signed 122 net new client agreements in the three months ended September 30, down from 168 a year earlier.

That saw First NZ downgrade its recommendation from outperform to neutral while Macquarie and Deutsche Bank held outperform/buy ratings.

First NZ analyst James Schofield said 2013 had been a rollercoaster for the company with its corporate governance and accounting issues.

"Until now the operational story has been intact. In spectacular fashion, 3Q figures now suggest issues on the operational front."

Schofield said a second soft quarter showed the company was facing more than seasonality with the slowdown accelerating.

Macquarie was more upbeat, with its research saying although the new client sales numbers were not good it expected client additions to bounce back in the fourth quarter. Deutsche analyst Stephen Ridgewell said the company still looked on track to deliver 51 per cent sales growth in the 2013 financial year and 30 per cent in 2014.

"We remain of the view that there is an attractive long-term market opportunity for Diligent, but that growth will continue to slow given that board portal penetration is reaching saturation levels for larger companies, which have driven Diligent's recent growth, and new growth drivers will take time to kick in."

Yesterday Diligent said there would be a further delay in the release of its half-year accounts. They had been due by October 28 but the company says it could now take a further 45 days.

Diligent closed up 12c at $4.30 yesterday.

RECORDING BAN

Aucklanders might own the majority of lines company Vector but they won't be able to see any coverage of its annual meeting via the mainstream media.

Vector has once again asked media not to use recording devices at its AGM on Tuesday. Even photographs are banned.

A Vector spokeswoman said the decision was down to chairman Michael Stiassny.

"Our chairman regards these meetings as shareholder meetings. And in the past, there has been discomfort expressed by them about photographers," she told a Herald staffer.

The Auckland Energy Consumer Trust, which represents Vector's electricity customers in Auckland, Manukau and parts of Papakura, own just over 75 per cent of the company.

Shareholders can view the meeting but only via a webcast on Vector's own website.

Vector shares have taken a bit of a hammering of late and are down about 9.7 per cent over the last year. Yesterday they closed steady at $2.60.

UNDER PRESSURE

Lumino dentist owners Abano Healthcare could face pressure to allow potential takeover bidders Archer Capital and Peter Hutson's Healthcare Industry to undertake due diligence.

Abano has so far taken a tough stance against Archer and Hutson, stopping them from having access to information and saying their offer failed to reflect Abano's value or prospects.

Stock Takes understands talks are being held in the background with Abano's institutional investors about the performance of the dental business.

One fund manager said he questioned the downside in Abano letting Archer/Hutson undertake due diligence given Archer was not a competitor but a financial investor.

Archer Capital is an Australian private equity firm with investments in several companies ranging from V8 Supercars to dairy product firm Brownes and hospital operator Healthe Care.

Healthcare Industry is Abano's largest shareholder.

The stalemate doesn't appear to be doing any damage to Abano's share price which has risen about 15 per cent since the offer was revealed on August 7.

Abano closed up 2c at $6.78.

PATCH OUT

Pumpkin Patch is to fall out of the NZX50 index from Monday as part of changes to the index.

The children's clothing retailer is to be replaced by Z Energy which will enter the top 50 after its sharemarket debut in August.

After a slight dip following its listing Z Energy shares have trended upwards. Quarterly data released to the market this week had some interesting inclusions including noting two robberies in the three months to September 30 and one "lost time injury".

The amount of fuel sold was up overall, although the amount of petrol it sold was down slightly.

The company is due to report its half-year result on November 7 where analysts will be looking closely at whether Z Energy has met its prospectus forecasts.

Z Energy shares closed up 2c yesterday at $4.03.

NO GO

A second property float won't be coming to market. There had been talk around NZ Retail Property Group being behind an initial public offer to help fund development of a new retail centre in Auckland's northwest but Stock Takes understands it has been put on ice indefinitely. The cancellation isn't being blamed on any one factor but a range of issues.

MORE TECH MONEY

Technology start-up GeoOP has raised $10 million from high net worth investors, exceeding its $8 million target.

The firm, which offers a mobile app for tradies to help them manage jobs, now has 280 shareholders on board including four institutional investors.

The company is expected to announce a date for listing on the NZAX next week.

- NZ Herald

Tamsyn Parker

Tamsyn Parker is the NZ Herald's Money Editor

Tamsyn Parker is the NZ Herald's Money Editor. A business journalist for ten years, she has worked in the UK and NZ for the New Zealand Herald, the National Business Review and a specialist publication on investment products for financial advisors. She is passionate about helping readers learn more about to make their money work for them.

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