The New Zealand sharemarket lapsed into the red in late trading today, after being underpinned by takeover rumours circling top stock Telecom for much of the session.
The benchmark NZSX-50 gross index closed down 5.75 points at 3607.84, while the NZSX all capital index added 0.63 of a point to
1041.77.
Telecom closed up 2 per cent at 458 after an unsourced Dominion Post report said New Zealand billionaire Graeme Hart could be sizing up the telco, which shed 20 per cent of its value last month on the prospect of more heavyhanded regulation.
Mr Hart's majority-owned Burns Philp Ltd is cash rich after spinning off its Goodman Fielder and Uncle Toby's units for A$3 billion ($3.58b).
The rumours were played down by market commentators, who thought Mr Hart was more likely to look at food companies in North America or Australian packaging group Amcor Ltd.
Forsyth Barr's David Price said the stock bounced after a seller keen to exit the company since last month's regulation news offloaded the stake in a block via major institution Goldman Sachs.
The identity of the buyer was unknown, but the sale released a large overhang weighing on the stock.
"That helped clear the way for the stock to have a better day, along with the speculation about Graeme Hart," Mr Price told NZPA.
Telecom was easily the most heavily traded stock on the local bourse and the third most active on the Australian exchange.
Food group Goodman Fielder Ltd fell 5 per cent, or 13c, to 240 -- just a fraction above its initial public offering (IPO) price of A$2.00 ($2.39) -- on concerns the company could fail to meet the prospectus earnings forecasts due to rising input costs.
"We struggle to get anywhere near the current share price as a valuation," Mr Price said.
"When they were previously listed, they always used to have something go wrong somewhere all the time.
"Let's hope it's not a repeat of that."
Mr Price said in the current climate, stocks needed to "meet or beat" expectations just to stand still.
Casino operator Sky City closed 5c lower at 528 after an initial flurry on news Australia's biggest wagering company, Tabcorp, had made a A$1.9 b ($2.27b) takeover offer for market number two, UNiTAB, trumping Tattersall's agreed bid.
Tabcorp was seen as the most likely rival bidder, although Sky City was an outside chance.
"The sector is in play and people look at Sky City and say 'are they next?'," Mr Price said.
"There is no end game yet. Anything is still possible. Whet her they are the suitor or being suited."
Among the other majors, Fletcher Building eased 12c to 898, F&P Healthcare lost 10c to 440, F&P Appliances lifted 2c to 440, The Warehouse added 3c to 390, Sky TV rose 4c to 560, Contact Energy fell 3c to 774 and Auckland Airport was flat at 208.
Dual-listed Promina, Australia's third-largest general insurer, added 1.6 per cent to $7 after announcing the sale of its Vero Lenders Mortgage Insurance Ltd to Genworth Financial Mortgage Insurance Pty Ltd for about A$220m ($263.25 m).
Rises and falls were closely matched at 48 and 50 respectively among the 150 stocks traded.
Turnover of 62m shares worth $255m was dominated by Telecom on $153m.
- NZPA
The New Zealand sharemarket lapsed into the red in late trading today, after being underpinned by takeover rumours circling top stock Telecom for much of the session.
The benchmark NZSX-50 gross index closed down 5.75 points at 3607.84, while the NZSX all capital index added 0.63 of a point to
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