Z Energy looks likely to exit the share market leaving a $2 billion hole to fill. Photo / File
Z Energy looks set to delist from the New Zealand stock exchange after Ampol this week received Commerce Commission approval to buy the stock.
Jarden analyst Grant Swanepoel said there were still some conditions to meet, including approval from the Overseas Investment Office (OIO), but the ComCom approval was the big one.
Clearance is subject to an undertaking from Ampol to sell Gull, the country's third-biggest fuels company.
This week Ampol said it would sell Gull to Australian investment firm Allegro for $572 million.
"There are still some niggly conditions with the ComCom agreement with the need to make sure Allegro has the correct intentions with buying Gull."
But Swanepoel said Allegro did not have any affiliations to upstream oil and gas and had a record in New Zealand of being a fairly good player.
"They have also signed up to a five-year security of supply deal with Ampol which deals with most of the ComCom's concerns.
"While the final paper comes out in a couple of days' time, I don't see the ComCom approval having anything in there that will hold this deal up."
Next Friday Z Energy's shareholders will meet to vote on the deal, which will need 75 per cent approval by vote and at least 50 per cent of registered shareholders voting.
Swanepoel said the independent valuers' report had come in with a range of $3.50 to $4.05 and the offer was $3.78.
"That is slap bang in the middle. There is no reason why any of the passive and retail investors won't be just ticking that box."
Swanepoel said he did not see any realistic reason why the OIO would block the deal, although there was always the potential for political intervention
"You always have the potential of a minister grandstanding. But there is just so much going on. Who knows? With the 25c or 28c discount the Government are giving us, there could be an opportunity to get a soundbite out there.
"But having said that, I think the OIO was waiting for the official ComCom outcome to give them impetus to get something done.
"We are expecting an outcome by the end of March for investors to get their $3.78."
Z has a market capitalisation of close to $2 billion and its exit will leave a sizeable hole in the sharemarket. Swanepoel estimates that the stock is just outside the 20 largest on the exchange.
"We never like to see stocks leaving the NZX but, having said that, this one was not enjoying a very strong ride in the last year or so as negative ESG [environmental, social and governance] credentials were weighing down on it as well as Covid.
"It was quite a tough one to find new investors. But it is never good to have any stock leave the NZX, particularly one that had quite a unique portfolio positioning - the only real retail oil play we had to invest in."
Swanepoel said there was a possibility that Gull could be listed on the sharemarket down the track, given that Allegro was a private equity investment firm.
"Private equity players are always looking to add some value and then extract some value. That one could come back."
He said Allegro could also look to mop up other second-tier players and create a more formidable fifth player in the market.
"Who knows what they do? It means the market could see some activity in the next few years in this space."
The clock is ticking on Air New Zealand's long-delayed capital raise but one analyst believes it's a more attractive proposition than it was a week ago.
Portfolio manager and research analyst at Harbour Asset Management Shane Solly says the border reopening timetable to allow tourists back into the country is crucial.
It gives Air New Zealand certainty on the recovery of passenger revenue, even though demand will be lumpy.
The airline is expected to raise up to $1.2b — about 75 per cent of its current market capitalisation — to give it increased balance sheet flexibility as it regrows its international network.
It said last month that it would go ahead with the raise around the end of March, depending on market conditions.
Solly says those conditions have also been improved by the oil price dipping from its high of nearly US$140 ($204) a barrel immediately after Russia's invasion of Ukraine.
Air New Zealand, with its international flying still limited, was not exposed to the extreme oil prices, although the outlook remains volatile for fuel, now the airline's second-biggest cost behind labour.
He says airlines with less exposure to the war zone were in a better position than others.
The Dow Jones Airline Index had recovered by 23 per cent from a two-year low on March 7, reflecting the United States carriers' more limited exposure.
Air New Zealand, with a Pacific Rim focus and growing emphasis on the United States, was operating in the right part of the world for investors.
"They're going to focus on areas that have traditionally done well and the question is when you spiral up with the international piece of the business."
While Air New Zealand may not face the same level of competition on long-haul routes in the short term, it would be intense on the Tasman, with Qantas already announcing that it was rebuilding its network and subsidiary Jetstar offering cut-price fares in the middle of the year.
Pushpay has been oversold and is now trading at roughly half its fair value, according to Morningstar.
The stock is down 42 per cent for the year.
"We believe Pushpay fell victim to the recent indiscriminate selling of technology stocks," the research and rating agency said in a March 16 note.
Morningstar says Pushpay shares, which were recently trading on the NZX at $1.07, have a fair value of $1.95.
It says Pushpay is profitable - unlike its smaller peers - and it sees the maker of digital tithing and church management software on a strong growth trajectory through until at least 2026.
But while it painted Pushpay as under-appreciated and oversold, Morning Star's new fair value rating was still a trim on its former rating of $2.05.
The clip came a day after Pushpay tightened its guidance. The firm, which has most of its operations and sales in the US, now expects its full-year operating earnings to be between US$61.5m and US$63.5m vs its previous forecast of US$60.0m to US$65m.
Morningstar sees headwinds as Pushpay looks to expand beyond its base of large Protestant churches to smaller churches - where cheaper rival Tithely current leads the market - and Catholic congregations, where Nasdaq-listed Blackbaud is the most popular software.
The agency sees Pushpay releasing a cheaper product for small churches - something chief executive Molly Matthews earlier raised as a possibility - and potentially lowering the price of its existing products to lure what Morning Star describes as "more price-sensitive Catholic customers".
But Morningstar also sees the Auckland-founded firm pushing through these challenges to double revenue to US$354m by 2026, with net profit growing by around 20 per cent per year over the period.
Kiwi investors who dived into US electric car maker Rivian when it floated on the Nasdaq last November have seen its share price tumble since then.
Rivian's initial public offer raised US$12b, making it the largest public offer in America last year. Its shares were priced at US$78 and peaked on November 16 at US$172.01.
But by March 16 they had fallen to US$41.58.
Kristen Lunman, chief executive of investment platform Hatch, said the size of the IPO and the subsequent share price spike certainly reflected investors' excitement about the EV market.
"At the time, the fact that they could dominate in a niche area [all-terrain vehicles], combined with investment from Amazon [their first commercial customer, having already placed an order for 100,000 vehicles], made for many a solid enough EV investment as an alternative to Tesla/NIO, even GM. Add to this, billionaire investor George Soros bought nearly 20 million shares of Rivian stock worth US$2b late last year."
But Lunman says Rivian has had some teething pain since then.
"They've had a few issues with opening a new plant in the US, and then production has been slow thanks to supply chain woes, with SUV production mainly being pushed out to some time this year.
"Facing further supply chain disruptions and component and material price increases, they announced a price increase on Rivian pre-ordered vehicles earlier this month."
Lunman said many people took to social media to complain, and Rivian's share price fell 25 per cent in the two days after the price hikes were announced. The increases have since been rolled back.
She said analysts (and Rivian backers) still believe Rivian can be "the one" that can challenge Tesla, but recognise that ramping up vehicle production will be a bumpy ride.
"They still hold investor interest to win in a niche area of pickups, vans, and SUVs and still have the backing of Amazon (and Soros and significant pension funds). There is certainly no shortage of demand (over 70K back-ordered pickups), but supply chain woes are expected to disrupt production through 2022 - with semiconductor chip shortages being the most trying."
Lunman said it was still early days in the EV market.
"With increasing competition and a track record of delivery that remains to be seen, we can expect continued losses, and it's not an investment for the faint of heart."
The airline sold its last slots at Heathrow in 2020.