NZ stocks: Tenon shares rise on bid speculation as market edges

12.30pm

Interest on the sharemarket today centred on timber products company Tenon, as speculation mounted that a mystery bidder was about to trump Rubicon's $1.85/share bid.

Tenon was up 3c to $1.897 after media reports that Rubicon's bid for control may have flushed out a mystery bidder. The National Business Review reported today that it understood a new offer was being prepared following an independent report that labelled Rubicon's $1.85/share offer as unfair.

The paper named Norske Skog as a possible bidder but the company said it specialised in newsprint and magazine papers, not timber products.

Goldman Sachs JBWere broker Murray Rutherford said his firm had always believed there would be a contested interest in Tenon.

"The new player hasn't emerged at this stage. We are of the view that an industry player would be able to pay more than a non-industry (investment-type) company because they can enjoy synergy benefits and so on."

Some retail stocks got a boost from retail sales stats today, which showed sales were the strongest in the March quarter for seven quarters.

But the strong sales made another rate rise on June 10 almost certain.

'It was a strong performance for March but that's obviously a twin-edged sword," said Mr Rutherford.

"It's a very good signal for retail stocks but perhaps another reason to support the tightening track that the Reserve Bank is headed along, which is unfortunate."

The Warehouse rose 7c to 433 and Michael Hill International rose 10c to 595.

The benchmark NZSX-50 gross index was up 5.76 points at 2574.58 at noon, while the NZSX-All capital index was up 1.80 points at 872.98.

Dominant stock Telecom, which yesterday edged off a six-month low with a 2c gain, rose another cent today to 558.

The company is on tenterhooks about the Government's decision due next week on local loop unbundling. Telstra chief executive Ziggy Switkowski will put the case for freeing up the lines at luncheon in Wellington today.

Turnover in Telecom made up $10 million of the market's total turnover of $23 million.

Another takeover target, Wrightson, was unchanged on 140 following an independent report valuing the company at 161-186. The independent directions urged shareholders to reject Rural Portfolio Investments' bid but some retail brokers, ABN Amro Craigs in particular, have questioned the figures in the Grant Samuel report. The brokerage is urging acceptance.

Fisher & Paykel Healthcare, which yesterday reported it had put a new anti-snoring mask on the market, was up 3c to 1225.

Auckland Airport was up 4c at 655 and Contact Energy was up 3c to 578.

Among other movers, Hellaby was up 4c to 495, Nuplex was up 6c to 524, Tower was down 2c to 150, Vertex was up 3c to 168, and Sky City Leisure was down 3c at 78c.

In all, there were 40 stocks up and 17 down among the 109 traded.

- NZPA