New Zealand shares rose, led by Metlifecare after the retirement village operator received a new takeover offer from its on-again, off-again suitor, EQT.
The S&P/NZX 50 Index advanced 97.51 points, or 0.8 per cent, to 11,656.21. Within the index, 34 stocks rose, 8 fell, and eight were unchanged. Turnover was $111 million.
Metlifecare led the benchmark higher, jumping 10.3 per cent to $5.76 after Swedish investor EQT made a new takeover bid at $6.00, a dollar less than the original offer but $1.78 more than Friday's closing price of $5.22.
EQT's Asia Pacific Village Group was trying to back out of the deal and faced protracted litigation if Metlifecare shareholders voted to proceed with a claim at a special meeting this week. That's now been deferred, and Metlifecare's board will resume talks with EQT after receiving a new offer yesterday. Chair Kim Ellis said its largest single shareholder, the New Zealand Superannuation Fund at 19.9 per cent, was supportive of the new offer.
"The fact that EQT has come back to the table suggests there is some recognition that the sector remains attractive in terms of longer-term growth," said Shane Solly, a portfolio manager at Harbour Asset Management.
Other retirement stocks also rallied on the day with the vote of confidence in Metlifecare reminding investors that retirement operators came out of lockdown relatively strongly, he said.
Oceania Healthcare rose 3.3 per cent to 94 cents, Summerset Group advanced 2.7 per cent to $6.77, Ryman Healthcare gained 1.5 per cent at $13.10
Trading was generally quiet with an "information vacuum" as investors wait to see another tranche of domestic results from the June period and from the US reporting season.
"We are in this period of time where there is a bit of a gap in information, but there is certainly plenty of capital sitting on the side-lines waiting," Solly said.
Some large firms also gained as investors reallocated their portfolios at the start of the quarter.
Contact Energy rose 2.7 per cent to $6.88, Meridian Energy advanced 2.6 per cent to $5.07 and Fletcher Building gained 2.3 per cent to $3.59.
Fisher & Paykel Healthcare rose 1.9 per cent to $35.15, while A2 Milk fell 1.1 per cent to $20.90 having gained 8.7 per cent across last week.
Retailer Kathmandu Holdings rose 2.5 per cent to $1.23. Solly said investors were continuing to digest the group's "ripper result" last week which saw the share price run up and then gave a little bit back. The stock is up 8.9 per cent this month.
Auckland International Airport dropped 1.4 per cent to $6.39 and Air New Zealand fell 0.3 per cent to $1.455. The spike of new Covid-19 cases in the Australian state of Victoria has put the brakes on the prospect of a full trans-Tasman bubble, Solly said
Z Energy posted the day's biggest decline, dropping 2.5 per cent to $2.74.
Outside the benchmark index, cancer diagnostics company Pacific Edge continued to rally, gaining 5.5 per cent at 58 cents. On Friday, the company announced its Cxbladder cancer test had been approved for use by the US Centres for Medicare and Medicaid Services which will bring in considerable amounts of revenue.
"The company can potentially keep supporting its growth from that cashflow," Solly said.