NZ stocks: Montana slides as Lion mops up

Winemaker Montana dominated the New Zealand sharemarket yesterday as Lion Nathan moved to sweep up the remaining 4.27 per cent required to gain a controlling stake in the company.

The lid was taken off Montana shares yesterday after trade was halted on Friday to allow the market time to digest competing bids between Lion and British liquor giant Allied Domecq.

As expected, investors lined up in droves to take advantage of Lion's partial offer of $4.65 a share, which trumped a $4.40 full bid by Allied.

With only formalities standing in the way of Lion declaring its partial takeover a done deal, Montana closed down $1.05c at $3.62 - roughly the level it was trading at before the bidding war began.

"Clearly people have just taken the takeover premium off the price this afternoon," said Nigel Scott, ABN Amro head of institutional dealing.

On Friday, Lion Nathan gained the upper hand by effectively sidestepping a trading barrier on Montana shares, using the recess to bump its stake to 46.46 per cent from 28 per cent in offmarket deals with institutions.

Yesterday, 16.76 million Montana shares valued at $77.92 million had changed hands by the market's close.

Mr Scott said small investors would be told today whether their offers had been transacted, and Lion was expected to announce it had gained the controlling stake.

Lion Nathan closed down 15c at $4.65.

Aside from the Montana story, it was a fairly typical quiet Monday with light turnover in most stocks traded, although the broader market did manage to close a little stronger.

The leading NZSE-40 index closed up 9.83 points at 2017.66, from a mid-morning low of 1998.75, while the NZSE-10 was up 15.95 points at 900.29.

Total turnover was 43.38 million shares worth $143.18 million.

Market giant Telecom gained 21c to $5.66, software-maker Commsoft was up 6c at $1.12, Carter Holt Harvey rose 3c to $1.68 and DB Group was up 3c at $5.45.

On the losing side, Air New Zealand B shares were down 2c at $2.20, Advantage Group closed down 12c at $1.45, and AMP closed down 19c at $23.46.

Fletcher stocks also lost ground, with Building slipping 1c to $2.07 and Energy down 3c at $8.90.

Fletcher Challenge yesterday denied reports that it had received competing offers for its Energy assets.

It was reported that a New Zealand group, Greymouth Petroleum, headed by businessman Mark Dunphy, was considering making an offer for the division.

Baycorp lost 40c to $12.10 in early trade, before recovering to end unchanged at $12.50.

Baycorp earnings were reported in the Sunday Star-Times to be downgraded by JP Morgan, although John Rattray, head of institutional broking, said it had neither downgraded Baycorp's earnings nor its recommendation on the stock.

Yesterday, Baycorp issued a statement saying it was on track for a record first-half profit.

Managing director Keith McLaughlin said the company remained on track to achieve its projected earnings for the present year and beyond.

Mr McLaughlin said the article implied that the outlook for the company had deteriorated recently and, if interpreted in this manner, this would be very misleading to the market.

"In fact, Baycorp will announce a record interim profit when it reports the financial results for the six months to December 2000 on February 21, he said."

The Warehouse shed 15c to $5.45 despite releasing a positive December quarter sales number on Friday.

- NZPA