Australian stocks: Shares flat but Mayne soars

SYDNEY - Australian shares ended flat on Thursday, held back by the banking and resources sectors, though Mayne Pharma soared after a A$2.6 billion takeover bid from US drugs group Hospira.

Retailer and takeover target Coles Myer was another big mover rising 3 per cent to A$14.61.

Coles, which has rejected a takeover approach, reported a 14 per cent rise in annual underlying profit and revealed that another possible bid was in the works from a second private equity bidding consortium.

Australia's benchmark S&P/ASX 200 Index shed just 2.6 points to close at 4,995.9 based on the latest available data.

Shares in the generic cancer drugs group Mayne hit a record A$4.26 early on after news, prior to the open, of Hospira's friendly takeover offer at A$4.10 a share. They ended the day at A$4.16, a gain of 34 per cent.

"From the early price indication it looks like there could be a process which involves some bidding tension. It could be from any of the global pharmacy players out there, it might be from private equity," said Atul Lele, a portfolio manager at White Funds Management.

Another focus for the health sector was medical centres group Primary Health Care rejection of a proposal by Symbion Health to buy its SDS pathology business.

But resources were a drag on the market as commodities prices continued to peel back.

"Resources and energy are two big chunks of the market that have been under pressure and we're still seeing, in the second-line resource stocks, some pressure coming through," said George Clapham, portfolio manager at ABN AMRO Asset Management.

Shares in Australian packaging group Amcor added 3 per cent to A$7.27. The group said it had not received any takeover proposal and was not aware of the identity of any party looking to buy its shares on the market.

Primary Health Care Ltd. fell 1.9 per cent to A$11.87 after it rejected the proposal from Symbion.

Symbion shares gained 0.9 per cent to A$3.26.

- REUTERS