NZ stocks: Montana hogs the limelight

Montana shares dominated turnover in an active market yesterday, as a shadowy third party appeared to be snapping up shares in the winemaker.

As signalled, British liquor giant Allied Domecq was in the market early to secure a strategic 10 per cent stake in Montana at $4.55, but by the closing bell had managed to acquire only 6 per cent. Allied said after the close that it planned to stay in the market at $4.55.

More than 12.2 million Montana shares - 5.7 per cent of the company - traded in the opening minutes as UBS Warburg bought on behalf of the British liquor giant. By the end of the day that had risen to 13.68 million turnover in Montana, valued at $62.30 million.

Montana, in which Peter Masfen has a substantial stake, closed up 35c at $4.60.

Cameron Stewart of ABN Amro said Allied managed to get about 10 million shares. "You can see that they're there for $4.55 but over the top has come some other player through another broker paying up to $4.60 for stock - we think it's a third party, it's not either Lion or Allied. The bidding war continues and the contest's started to hot up a bit."

Telecom soared more than 4 per cent, to close up 25c at $6.25, after announcing a strong third-quarter profit result and alliances over mobile phones with Hutchison Telecom in Australia and with US software giant Microsoft with its internet portal Xtra.

Telecom's strategic alliance with Hutchison was overshadowed by the surprise Microsoft announcement. "I think that's what people got excited about, that Microsoft are investing $300 million into convertible notes of Telecom and are linking the Xtra and MSN portals together. The (third-quarter) result was fairly ordinary and pretty much in line with what we expected," Mr Stewart said.

"It's good news for Telecom to have a player like Microsoft in there - I don't think they have intentions to take the company in terms of a stake in it but an alliance with Microsoft is always very good news."

Fisher and Paykel was up 8c at $9.18, and PDL jumped again, this time up 75c to $10.00, as a bidding war continues.

Tower was strong, up 9c at $5.69, TrustPower rose 10c to $3.30, Advantage rose 4c to 87c, Auckland Airport was up 8c at $3.53, and Genesis rose 19c to $4.00.

Sky City was down 14c at $9.35, Tranz Rail lost 7c to $3.75, Frucor eased 3c to $1.69 and Baycorp was down 35c at $11.85.

The NZSE-40 capital index closed up 26 points, or 1.27 per cent, at 2090.92.

- NZPA