New Zealand shares were led higher by Metlifecare after the retirement village operator said it had attracted a sub-par offer from a credible buyer.
The S&P/NZX 50 Index rose 83.25 points, or 0.8 per cent, to 10,975.49. Within the index, 27 stocks rose, 16 fell and seven were unchanged. Turnover was $189.1 million.
Metlifecare jumped 12.8 per cent to $5.73, a 12 month-high, with 576,000 shares traded. That was more than twice its 90-day average of 248,000, and comes a day after an investor bought 3.6 million shares at $5.05 apiece. Metlifecare's board suspended a $30m share buyback programme while it engaged with the would-be buyer.
Michael McCarthy, chief market strategist at CMC Markets, said the weaker New Zealand dollar was making assets cheaper for cashed-up overseas buyers, and that the non-binding nature of the unnamed suitor had the hallmark of private equity.
"From an international point of view, some of these businesses are looking very cheap," he said.
McCarthy said boards need to weigh up highly conditional bids very carefully, because if they don't go ahead, they can be a big drag on a share price. However, "from the market reaction today, there seems to be a consensus view this one's going ahead."
Other retirement village and aged care operators were also boosted. Summerset Group Holdings rose 3.5 per cent to $7.43, Oceania Healthcare was up 2.8 per cent at $1.11 on a volume of 1.4 million shares, Arvida Group increased 1.9 per cent to $1.61, and Ryman Healthcare increased 1.4 per cent to $14.34.
Other healthcare stocks appeared to similarly enjoy the halo effect, with Fisher & Paykel Healthcare up 1.4 per cent at $20.78 on a volume of 1.1 million shares, more than twice its average of 440,000. Ebos Group recovered some of yesterday's decline, up 0.6 per cent to $22.95. Its cornerstone shareholder, the Zuellig Group, sold down its stake in a block trade yesterday.
A2 Milk rose for a second day, having upgraded its outlook at yesterday's annual meeting. The stock rose 3.9 per cent to $14.67 on a volume of 1.6 million shares, more than twice its 768,000 average. Synlait Milk, which supplies A2, rose 2.5 per cent to $9.48.
Investore Property fell 7.3 per cent to $1.77 after it resumed trading following yesterday's $65m placement at $1.75 a share. It also shed rights to a 1.9 cent dividend.
Westpac Banking Corp fell 2.6 per cent to $27.41. The Australian bank was accused of breaching laws to prevent money laundering and terrorism financing by Australian authorities today. Australia & New Zealand Banking Group was also down, falling 0.7 per cent to $26.63.
Power companies were largely weaker, with Meridian Energy down 2.3 per cent at $4.35 on a volume of 3.2 million shares, Contact Energy fell 1.8 per cent to $6.68 on a volume of 1.8 million, Trustpower fell 1.3 per cent to $7.64 and Genesis Energy declined 1.1 per cent to $3.16.
Spark New Zealand was the most traded stock on a volume of 5.8 million shares. It rose 0.5 per cent to $4.47. Of other stocks trading on volumes of more than a million shares, Mercury NZ rose 1.1 per cent to $4.77, Kiwi Property Group was up 0.3 per cent at $1.55, Pushpay Holdings decreased 0.9 per cent to $3.50, and Auckland International Airport rose 0.8 per cent to $9.05.
Chorus extended its gain following yesterday's favourable draft decision by the Commerce Commission on how it would create a regulated pricing regime for fibre operators. It rose 1.8 per cent to $5.65 on a volume of 1 million shares. Standard & Poor's today said the threshold for downgrading Chorus's credit rating was higher, citing the favourable regulatory framework.
Precinct Properties New Zealand rose 1.2 per cent to $1.765 after saying at the annual meeting that it is eyeing new developments. Argosy Property was up 1.1 per cent at $1.395 after reporting increased first-half profit due largely to property valuation gains.
Outside the benchmark index, Serko fell 0.9 per cent to $4.54 after saying its rate of burning cash would accelerate in the second half as it pursues rapid growth in North America.
Tower rose 3.6 per cent to 72.5 cents after returning to profit and signalling dividend payments will resume in the 2020 financial year.