KEY POINTS:
NZX-listed 42 Below - soon to be imbibed by Bacardi - sold its 4.4 per cent stake in Charlie's last week. The sale ends speculation that the rum making giant might have swallowed the juice-maker as a chaser to its vodka shot.
Bacardi obviously wasn't interested, so the
shares have been sold to Wellington businessman Tony Kerridge.
Kerridge this year sold his investment in coffee house Caffe L'affare to international food and beverages group Cerebos Greggs.
It may be that his hands-on experience in the cafe and beverage business makes him a more valuable shareholder for Charlie's in the short term. The company isn't really ready for Bacardi-sized expansion. It still has some work to do cementing its dominance in the New Zealand market - in particular increasing the amount of juice it sells in high-margin cafes.
Charlie's shares have been on a solid run for six weeks. They went up nearly 9c - or 100 per cent - since August to a high of 18c on Wednesday. They closed yesterday at 17c.
Woolworths faces an even bigger fish
The emergence of UK grocery giant Tesco as a possible buyer for The Warehouse has really put the acid back on Woolworths Australia.
Suddenly it has to shift its thinking from that of an aggressor sizing up the New Zealand market to that of a defender protecting its patch.
Woolworths' $24 billion market cap looked pretty intimidating next to The Warehouse's value of $2 billion. But Tesco has a market cap of $90 billion.
So it can afford to outgun Woolworths if it wants to.
But what would Tesco actually want with New Zealand's tiny market?
How about a springboard into Australia? A position from which it could launch a bid for Coles Myers?
These are hypothetical questions perhaps, but questions that must now be pondered by a Woolworths team that is already being goaded by Australian media for taking too long to launch a knockout bid.
The Warehouse shares closed up 8c at $6.99 yesterday.
Tower of Babel
There was trading chaos on Monday as investors in Tower tried to make sense of the new post-split value of their shares. The actual split - into Tower New Zealand (TWRZ) and Tower Australia (TAL) - doesn't happen until next week, but trading now is on a post-split basis, that is minus the TAL shares Tower investors are entitled to as part of the split.
The NZ exchange gave TWRZ shares a theoretical opening price of $3.39, valuing Tower Australia's shares at A$2. In New Zealand, trading began at $3.25 before plunging to $2.05, then worked its way up to $2.58 before closing at $2.42.
The complicating issue is that no one really knows what the actual value of TAL shares will be when they begin trading next week.
Sydney-based Credit Suisse analyst Arjan van Veen is giving TAL a value of between A$2.50 and A$2.80 (or 15 to 17 times 2007 earnings).
He has a more negative on the outlook for TWRZ shares offering a 12-month target valuation of $2 and downgrading his recommendation to "underperform". TWRZ is trading on a "relatively full" multiple of 18 times the current Credit Suisse 2007 forecast, he notes.
Post-restructuring it will have a less-attractive growth profile (sub-10 per cent earnings growth) and faces significant challenges in restoring service levels after integrating its regional offices, he says. The industry in New Zealand also remains fragmented and requires a reduction in competition levels before it performs on par with the Australian sector.
TWRZ shares closed at $2.33 yesterday.
Life's a gas
The Accident Compensation Corporation has emerged from this week's New Zealand Oil and Gas (NZOG) rights issue as the company's largest shareholder with a 6.65 per cent stake. It was previously below the 5 per cent threshold at which it is required to declare its interest.
The increased holding should give the ACC a natural hedge against any increase in claims as the industry expands its hunt for new gas and coal reserves.
Before you write in, that was a joke. Stock Takes has no reason to assume that working on a Taranaki rig is any more dangerous than being as OOS prone office worker. NZOG shares closed at $2.33 last night.
International search
Infrastructure investor Infratil has made a point of seeking out international institutions to take up the $60 million worth of stock it is selling in the shakeout from last month's TrustPower transaction.
Last month Infratil paid $510 million for Alliant Energy's 23.8 per cent stake, taking its own shareholding in TrustPower to 50.1 per cent.
In a separate transaction, Tauranga Energy Consumer Trust has paid Infratil $85 million for another 4.4 per cent of TrustPower - increasing its shareholding to 33 per cent. But the Energy Trust chose not to exercise its right to buy about 13 million Infratil shares and these are now part of a book build being handled by ABN Amro.
There is also a further 4.4 per cent of unwanted TrustPower shares being sold.
Infratil is unlikely to be worried about who owns the TrustPower shares but it is understood to be interested in ensuring the Infratil shares go to international institutions - ideally about three or four long-term holders.
The company has no major international funds on its register and is looking for the type of shareholder that will understand the long-term nature of its ambitions.
That foreign focus has caused a few local institutions to feel a bit snubbed. But Infratil has complained before about the lack of long-term focus from local investors and this move seems to make sense.
Infratil shares closed down 4c at $4.95 yesterday. TrustPower closed down 15c at $7.50.
Salty tale
Shares in Sanford took off in March as the dollar started to fall and expectations grew that a new low-value currency era was about to begin. That didn't happen and the dollar is back trading around the US67c mark.
That hasn't resulted in a collapse in share price for the seafood exporter - probably because the renewed rise of the dollar has been relatively moderate compared with its brief descent. Also, some of the currency loss is likely to have been offset by lower fuel costs.
But Sanford shares have drifted slowly in the past three months from a July peak of $5.20 to yesterday's close of $4.60 ...
And there has been other unsettling news for the fishing industry.
Last month Northland's Ngapuhi wrote down the value of its shares in Aotearoa Fisheries (owners of Sealord) by 90 per cent, arguing that the move reflected how tough the "sunset industry" had become. That decision shocked the industry and prompted a minor sell-off in Sanford. The shares dropped 18c between October 20 and October 26, but have since recovered.
Sanford argues the move by Ngapuhi is politically driven and not a fair reflection of the company's value.
Meanwhile, an international report this month highlighted the threat of a collapse of global fishing stocks sparking renewed debate about the sustainability of local fisheries.
That is unlikely to rattle long-term shareholders who no doubt have a healthy cynicism about the environmental doom industry or they wouldn't be in the stock .
Also, a group of recreational fishers are taking legal action over what they argue is the Ministry of Fisheries' refusal to allocate them a fair share of kahawai compared with what commercial fishers get under the Quota Management System. That case is really more about the way the Government has undervalued the kahawai reserves. It would not have happened if the then Fisheries Minister had been properly advised on the real size of the kahawai resource, Sanford says.
In the short and medium term, the real driver of Sanford's share price will be the New Zealand dollar - which in theory should be due for a fall but which doesn't seem to pay much attention to theory these days.
