NZ stocks: Market softens as focus remains on Rubicon's Tenon bid

Takeover target Tenon took centre stage on the sharemarket today while small slips by a number of leading stocks pulled the benchmark index lower overall.

At the 5pm close the NZSX-50 index was down 6.32 points or 0.24 per cent at 2604.81, while the NZSX-All Capital Index was down 1.32 or 0.15 per cent at 880.41.

Peter Lynds of Direct Broking said that wood processor Tenon and to a lesser extent another takeover target Wrightson were the focus for the market today.

Last Thursday Rubicon offered $1.85 a share to secure a 50.01 per cent majority holding in Tenon, formerly known as Fletcher Challenge Forests, which is in process of selling its 107,000ha forest estate. Rubicon currently owns about 20 per cent of Tenon.

Hours before Rubicon announced its offer, Tenon upgraded its operating profit forecast for the ongoing businesses from $45 million to $58 million-$60 million for the June year.

Today Tenon shares finished 9c higher at 191, while Rubicon was up 3c to 88.

One Auckland broker said it was not surprising to see Tenon's share price advance beyond Rubicon's offer.

"The market is using the two pieces of news (the offer and the profit upgrade) to push the share price higher," he told NZPA today.

Direct Broking's Mr Lynds said the Rubicon offer "might be a move to flush out another bidder".

He said relatively light turnover in the stock and its move up to current its current level "basically means that the holders are holding on and are certainly not selling into the Rubicon offer".

The market's other big takeover target Wrightson was 2c higher at 141. The rural services company is currently the subject of a proposed $1.50 a share takeover bid by a Rural Portfolio Investments, headed by former Fonterra boss Craig Norgate.

Elsewhere, the market was "just a touch softer" Mr Lynds said, with most top stocks off "a couple of cents here and there".

Telecom ended the session 4c lower at 569 while Carter Holt Harvey finished 3c lower at 225.

Otherwise the market was "generally just pretty quiet, it might remain that way, sometimes in short weeks that happens".

Across the top 50 Auckland International Airport was down 8c to 652, BayCorp Advantage was down 6c to 306, Contact Energy was down a cent to 548, Fletcher Building was a cent higher at 456, Fisher & Paykel Appliances was up 5c to 442, Nuplex was up 13c to 480, Ports of Auckland up 7c to 749, Promina down 8c to 435, Sky TV up 10c to 535, Steel & Tube was down 4c to 395, TrustPower was up 5c to 405, Waste Management was down 5c to 425, and the Warehouse was up 2c to 440.

Total turnover today was worth $53.31 million with 62 rises and 46 falls among the 155 shares traded.

- NZPA