Market close: Sharemarket rises on Infratil takeover fever

Tilt Renewables, which has 343 operating turbines in Australia and New Zealand, climbed 17.4 per cent to $5.60. Photo / Supplied

The New Zealand sharemarket picked up some takeover fever as utilities investor Infratil and associated stocks Tilt Renewables and Trustpower, all rising strongly, were pursued by AustralianSuper fund for $5.4 billion.

The S&P/NZX 50 Index rose 169.80 points or 1.34 per cent to 12,889.40, after reaching a high of 12,908.89. There were 98 gainers and 46 decliners over the whole market on strong trading of 73.28 million shares worth $247.9 million.

In the biggest takeover bid to hit the local market, AustralianSuper is offering to buy Infratil at $7.43 a share, and this has been rejected by the Infratil board as "materially undervaluing its high-quality and unique portfolio of assets".

Infratil surged $1.17 or 19.24 per cent to $7.25 on trade worth $20.4m. Wind farm specialist Tilt Renewables, 65.5 per cent owned by Infratil, climbed 83c or 17.4 per cent to $5.60, and Trustpower, half owned by Infratil, rose 42c or 5.65 per cent to $7.85.

Sam Dickie, a senior portfolio manager with Fisher Funds, said there have been big moves in takeover land, and Infratil v AustralianSuper will be one of the most watched situations for the rest of the year.

He said no one was expecting the bid but it's a smart move by AustralianSuper to grow its investments. The Infratil management has the ability to handpick their investments and create value – over the past near 26 years since listing, Infratil has delivered total shareholder returns of 18 per cent a year and has a long-term target of 11-15 per cent a year.

Dickie said Infratil has an attractive portfolio, and AustralianSuper is a credible bidder but it would almost certainly need to increase its offer.

The Infratil board said it will consider any proposal to maximise shareholder value, but given the significant deficiencies in the AustralianSuper proposal, no further engagement is planned at this time.

As well as its shareholdings in Tilt Renewables and Trustpower, Infratil has 49.9 per cent of Vodafone, 66 per cent of Wellington Airport, 48 per cent of the highly profitable Canberra Data Centres, and majority stakes in American Longroad Energy Holdings and Galileo Green Energy.

Tilt Renewables has soared 40 per cent this month – it was $3.92 on December 4 – when Infratil announced it was completing a strategic review after inquiries about its Tilt shareholding. Now add AustralianSuper to the mix.

Should the Infratil bid succeed, AustralianSuper would have to make a mandatory takeover offer for Tilt Renewables, which has 343 operating turbines across nine wind farms in Australia and New Zealand. There's plenty in play. Previous recent takeovers have been $2.55b for TradeMe and $1.25b for Metlifecare.

Market leader Fisher and Paykel Healthcare recovered 41c to $32.09, but a2 Milk was down 22c to $13.85, and Fletcher Building lost 8c to $5.76.

Kiwifruit grower and packer Seeka climbed 35c or 8.64 per cent to $4.40 after increasing its earnings forecast for the present financial year to between $15m and $17m compared with the previous guidance of $9m-$12m. The Australian sale and lease back of orchards will also reduce net debt to between $75m and $85m at December 31 this year, compared with $116.8m at the same time last year.

Chorus gained 14c to $8.06; Ebos Group was up 20c to $25.20; Freightways continued its strong run, rising 16c to $9.80; Mercury Energy climbed 9.5c to $6.815; SkyCity Entertainment increased 8c or 2.55 per cent to $3.22; and Pacific Edge was up 9c or 10.11 per cent to 98c after gaining a broker's upgrade and moving from 70c on December 1.

Hallenstein Glasson told shareholders at the annual meeting that in the 18 weeks of the new financial year group sales had grown 14.51 per cent on the same period last year, driven mainly by strong online sales as physical store sales had been harder to achieve. Hallenstein's share price fell 13c or 1.95 per cent to $6.52.

Apple exporter Scales Corporation is paying an interim dividend of 9.5c a share on January 15, and said its net profit for the year ending December will be at the lower end of the $30m-$36m guidance. Scales' share price fell 5c to $4.74.