Sky TV leads index down while A2 gains on Synlait buy

Sky Network Television was the worst performer, down 2.7 per cent to $3.61. Photo / Greg Bowker

New Zealand shares dipped, with Sky Network TV weaker after its merger with Vodafone NZ was denied, while A2 Milk Co and Synlait Milk gained on a closer supply deal.

The S&P/NZX50 Index dropped 14.97 points, or 0.2 per cent, to 7160.86. Within the index, 25 stocks fell, 16 rose, and nine were unchanged. Turnover was $134.8 million.

Sky Network Television was the worst performer, down 2.7 per cent to $3.61. Port of Tauranga dropped 2.3 per cent to $4.29 and Stride Property declined 2.2 per cent to $1.80.

Kiwi Property Group dropped 0.4 per cent to $1.415, and NPT was unchanged at 63c. Negotiations between Kiwi Property and NPT over a property deal are progressing constructively but taking longer than expected, with a shareholder meeting now planned for April, NPT says.

Comvita was the best performer, up 2.4 per cent to $7.67.

A2 Milk Co gained 1.3 per cent to $2.40, while Synlait Milk rose 4.5 per cent to $3.24. A2 has bought an 8.2 per cent stake in Synlait at a small premium. Sydney-headquartered A2 bought 14.6 million shares at $3.275 apiece from Dutch dairy processor Royal FrieslandCampina, a 5.6 per cent premium to Thursday's closing price of $3.10. "They're confirming the partnership a bit more, that's good news for both parties really and they've both picked up on the back of it," said Grant Davies, investment advisor at Hamilton Hindin Greene.

"Synlait does a lot of the processing for the formula that goes to China, a big part of A2's growth in the long term is going to come through that avenue. Having said that, A2 use local processors and local cows in the UK and Australia where they sell fresh milk, so they're not completely tied to Synlait but it helps both companies to have a strong partner working together to export their product."

Restaurant Brands rose 0.4 per cent to $5.35. It says it has gained approval from Yum Brands, the parent company of Pizza Hut and Taco Bell, to acquire the only franchisee for those stores in Hawaii but the time taken for sign-off means full-year profit was at the lower end of guidance.

Settlement is expected in the next two weeks. The delay means profit excluding non-trading items in the year ended February 27 was at the lower end of the company's guidance of $30m to $32m, it said.

Outside the benchmark index, Tower was unchanged at $1.32.

ASX-listed insurer Suncorp Group said its proposed takeover of the NZX-listed general insurer would be "unlikely to materially change the competitive dynamic" in New Zealand.

The offer, worth a total of $219.3m, trumps a $197m deal already on the table and backed by Tower's board and major shareholders Salt Funds Management and Accident Compensation Corp to sell to Canada's Fairfax Financial Holdings at $1.17 apiece.