NZ stocks: Market continues to lose ground in morning

12.00pm

The sharemarket continued to trend downwards this morning as investors chased the share price of Rubicon and its takeover target, Tenon, higher.

At 11.30am, the benchmark NZSX-50 index was down 2.54 points at 2608.68, while the NZSX-All Capital Index was down 0.65 points at 881.08.

Among the 120 stocks traded on NZX this morning were 44 rises and 28 falls. Turnover was $17.2 million.

On Thursday last week, Rubicon offered $1.85 a share to secure a 50.01 per cent cornerstone in Tenon, which is in the middle of selling its 107,000ha forest estate.

Hours before Rubicon announced its offer, Tenon upgraded its operating profit forecast for the ongoing businesses from $45 million to $58 million-$60 million for the June year.

Rubicon currently owns about 20 per cent of Tenon, which was formerly known as Fletcher Challenge Forests.

At 11.30am, Rubicon shares were up 4c at 89, while Tenon shares were up 9c at 191.

One Auckland broker said it was not surprising to see Tenon's share price advance beyond Rubicon's offer.

"The market is using the two pieces of news (the offer and the profit upgrade) to push the share price higher," he told NZPA today.

"It's not surprising to see the share price ahead of the offer price in this case," he said, noting it was unclear whether Rubicon would revise its bid.

Tenon shares were "probably" fair value above the $2 mark, he said.

"At this stage the independent directors have said 'Don't sell'.

"I've got no doubt they'll (Tenon's independent directors) come out and say it's not a fair offer."

There was little other news of note as the sharemarket warmed to trading after the 4-1/2-day Easter weekend break.

Market heavyweight Telecom was down 3c at 570 on turnover of $6.5 million. Top 10 stock Carter Holt Harvey was up 1c at 229.

Other shares on the move included: AMP down 2c at 650, Baycorp Advantage down 8c at 304, Ebos up 3c at 354, Lion Nathan down 5c at 690, Nuplex up 13c at 480, Ports of Auckland up 3c at 745, Auckland International Airport down 5c at 655, and TrustPower up 5c at 405.

- NZPA