NZ Stocks: Sharemarket quiet as dust settles on takeover code

12.00 pm

The New Zealand sharemarket was very quiet today as the dust settled on busy takeover action and book squaring last week.

About $30 million of turnover totalling $41.3 million was transacted before the market opened today.

By mid-morning, the NZSE-40 capital index was down 1.63 points, or 0.08 percent, at 2084.42.

Topping turnover was Telecom's $8.67 million, followed by Australasian brewer Lion Nathan on $5.46 million.

Alan Wills of Forsyth Barr Frater Williams said trade so far reflected a typical quiet Monday morning.

"Also we had flattish markets overseas on the weekend," Mr Wills said.

Among the leaders, Telecom was down 1c at 562, Telstra gained 1c to 675, The Warehouse shed 1c to 544, Contact Energy was up 1c at 301 and Fisher & Paykel was up 15c at 1195.

Air New Zealand A and B shares were both up 1c, at 110 and 146 respectively. Carter Holt Harvey gained 2c to 172, casino operator Sky City was up 10c at 1100 and pay TV company Sky TV lost 5c to 335.

The main news this morning was a further attempt by Lion to gain control of winemaker Montana, this time under the new Takeovers Code which came into force yesterday.

Lion's full bid for Montana will start with a partial offer for the floating 11 percent not owned by rival Allied Domecq or in dispute, raising its stake over 50 percent again.

Lion would then make a bid for the remaining shares at 370 per share.

Last week Lion, which holds 62 percent of Montana, was forced to sell 19 percent of its shares which were declared defaulter securities, reducing its shareholding to 43 percent.

"What it's doing is putting a premium on the ones who haven't sold at all, and what they're saying is if Allied wants to sell the rest of theirs then they're prepared to take them at 370," Mr Wills said.

"But it's a cheeky first go under the new legislation, it will be interesting to see how this pans out. But it certainly puts a nice premium for the people who haven't sold at all."

Lion was down 9c at 540 and Montana was down 5c at 500.

Fletcher Challenge spin off Rubicon was up 2c at 72, having made an 11 percent gain on Friday. Fletcher Forests was up 1c at 31 on news reports that Chinese investment firm Citic had made a bid to buy the assets of the collapsed Central North Island forestry partnership.

"There again that's an opening gambit as well, and I think we're going to have an ongoing situation there which is pretty interesting, so I think people will focus on that stock for a while, and also Rubicon having most of their assets in Fletcher Forests," Mr Wills said.

Takeover subject TrustPower, New Zealand's fourth largest electricity retailer, was down 13c at 352 after an announcement chief executive Jeff Williams would retire on July 27.

There were 39 rises and 26 falls on the 119 stocks traded.

- NZPA