NZ stocks: Shares slide again, Powerco perks up

6.39pm

The sharemarket continued to slide in mixed trading today, but investors showed renewed interest in takeover target Powerco.

Grant Williamson from Hamilton, Hindin Greene said interest in Powerco picked up after the Takeovers Panel today cleared Prime Infrastructure's takeover offer for the company. "That certainly created a fair amount more interest from the arbitrage buyers in the Powerco market. It brings a bit more certainty to the deal," Mr Williamson said.

The panel had convened a meeting to determine if a side deal set up by Powerco's majority shareholders favoured them over other shareholders. Following the green light, Powerco edged closer to Prime's $2.15 per share offer price, rising 2c to 212. Turnover in the stock also picked up, with 5.9 million trades worth $12.6 million. Total market turnover was worth $98.4 million.

The benchmark NZSX-50 gross index lost 5.34 points to 2854.42, while the NZSX-All capital index fell 1.78 points to 949.98.

Of the 157 stocks traded today, there were 51 rises and 46 falls.

Top stock Telecom was one of the stocks to head south, slipping 1c to 600.

Freightways also fell, down 2c to 255, after Citigroup today cut its 12-month price target for Freightways from $2.88 to $2.69. The downgrade came after news Toll Holdings plans to open its own courier business in New Zealand, which could impact Freightways' market share.

Meanwhile Toll NZ was down 5c at 270.

Air New Zealand fell 1c to 162. Chief executive Ralph Norris said today the airline would wait two to three years before trying to revive its alliance plan with Qantas. The Australian competition authority yesterday okayed the proposed alliance, which would have seen Qantas take a 22 percent stake and the airlines co-operating on flights to, from and within New Zealand. Despite Australian approval, the tie-up cannot proceed in its original form as it was vetoed by the New Zealand High Court last month.

"There was a bit of interest there yesterday....but really as both airlines have said, it's really too late," Mr Williamson said.

NGC gained 2c to 303, after it declared a special 9cps dividend to use available tax credits before Australian Gas Light Co sells its 66 percent stake to Vector. AGL has agreed to sell its stake to Vector at $3/share, triggering a full takeover offer by Vector of NGC.

CDL Hotels rose 1c to 55, after announcing the conditional sale of a shopping centre and marina in Australia for $A111 million ($120 million).

Fletcher Building lost 5c to 580 on the back of some profit taking. "The stock has had a very good run in recent weeks and months, so it's not surprising that the profit takers just want to take a wee bit out of the market."

Feltex gained 2c to 158 following yesterday's annual meeting, where the company advocated a 'steady as she goes' approach to the upcoming year.

Other stocks on the move today included: Fisher & Paykel Appliances down 6c at 414, F&P Healthcare down 3c at 291, NZX down 10c at 770 and Turner & Growers down 5c at 335.

- NZPA