Baycorp soars on speculation

Shares in credit-checking company Baycorp Advantage yesterday soared 21 per cent in New Zealand to close at $4.18 - topping the price of a planned takeover offer from Australian investment fund Allco Equity Partners.

The price was the highest in more than 2 1/2 years, amid speculation that international credit-checking companies might also bid for Baycorp.

It was the equivalent of A$3.76 - compared with 17 per cent shareholder Allco's intended bid of A$3.50 a share for half of Baycorp's remaining shares, which would take it to 58.5 per cent.

The shares had already risen 4.5 per cent on Monday before the bid emerged. The takeover offer will be conditional on Allco securing 50.1 per cent control.

Baycorp directors yesterday advised shareholders to take no action until the company received offer documents and made a formal recommendation.

Allco unveiled the up-to-A$470 million ($522 million) offer on Monday night.

Baycorp Advantage is listed in Australia and New Zealand and sprang from Baycorp's ill-fated merger with Data Advantage in 2001. It is reported that less than 20 per cent of its shares are held in New Zealand.

Analysts speculated international credit checking giants such as Experian and TransUnion, of Chicago, could be interested in the company. TransUnion has existing ties, including a shareholding in Baycorp.

A Citigroup report said: "We would not rule out the possibility of a competing bid, with Experian targeting further Asian acquisitions and TransUnion already having an equity stake and a joint venture with Baycorp."

A source said Allco planned to spin off or sell Baycorp's debt collection business and cut IT costs, as well as tackle loss-making international ventures. Allco wants the company to make a cash return to shareholders of A$1.18 a share, or A$269 million.