NZ stocks: Telecom plumbs new lows; French bid for Frucor

12.30 pm

The sharemarket pushed lower today as market leader Telecom plumbed new eight-year lows.

The market highlight was a full bid by French food and drinks giant Groupe Danone for Frucor at $2.35/share, a 25 per cent premium to yesterday's 188 close. The cash bid, conditional on getting 90 per cent, values Frucor at $294 million.

Trading in Frucor was halted before the start of business.

Danone exercised an option to buy 20 per cent of Frucor from 31 per cent owner Bain Capital Inc.

Telecom fell 7c to 416, its lowest since September 1993. Brokers said Telecom was suffering in line with global telcos. On the local scene, there are reports that two of Telecom's two main rivals, Telstra-Saturn and Clear Communications, may get together to form one stronger competitor.

ASB Securities broker Andrew Kelleher said his firm liked Telecom on a medium-term basis and it was approaching levels they would advise investors to accumulate.

Telstra was down 12c to 588 following a downbeat report to investors yesterday.

The NZSE-40 index was off 8.58 points to 1887.30 on volume of just $19.3 million by just after 11.30 am. Fisher & Paykel fell back 20c to 1380 after soaring 55c yesterday when it announced a $US16-18 indicative price range for its healthcare division ADRs to be listed on the Nasdaq.

Contact Energy eased back 1c to 401 from its record of 402 touched yesterday. The company, under offer by cornerstone shareholder Edison Mission, will report its result on Friday.

There was still heavy turnover in Air New Zealand Bs, which eased back 2c to 31c after a 37 per cent gain yesterday. Just over 4.7 million shares changed hands. The As also fell 1c to 31 but only on moderate volume.

Other movers included: AMP, up 5c to 2185, Baycorp, up 10c to 1190, GDC, down 10c to 190, Indpendent Newspapers, up 3c to 345, Richmond, up 3c to 270, Sky City, up 5c to 11590, Steel & Tube, up 2c to 217, and Westpac NZ,down 6c to 1605.

There were 26 rises and 28 falls among the 109 stocks traded.

- NZPA