NZ stocks: Rival bid sparks late rally

The sharemarket gained ground yesterday after a rival bid for market leader Fletcher Energy was announced.

Fletcher Energy shares soared 40c or 4.5 per cent to $9.20 on turnover worth $34.62 million after Greymouth Petroleum said it had made an offer for the company - a division of Fletcher Challenge.

Greymouth Petroleum, in association with major Fletcher Energy shareholders and backed by leading financial investors, is offering shareholders a minimum cash component of $US3.70 ($8.60) per share.

It is making the offer through a consortium company, Peak Petroleum Corp New Zealand, led by former dealmaker for merchant bank Fay Richwhite, Mark Dunphy.

The bid tops Royal Dutch Shell's earlier offer of $US3.34 per share.

"It looks like an interesting deal," Forsyth Barr head of research Robert Mercer said. "But we'll have to wait and see whether shareholders think a bird in the hand is worth two in the bush.

"The deal with Shell is certain, versus a conditional offer from Greymouth," he said.

The Energy announcement pushed the benchmark NZSE-40 index up 4.42 points to 1988.14 by the close.

Total turnover was 28.58 million shares worth $91.51 million.

Among other Fletcher stocks, Building closed down 3c at $2.21, while Forests was unchanged at 31c following Monday's announcement banks financing the company's 50:50 joint venture with Chinese-owned Citic, the Central North Island Partnership (CNI), had called in the receivers. "That was well expected and it is positive for Forests as it starts the process of tidying up those assets," Mr Mercer said.

A major loser of the day was Wrightson, down 10c at 66c after investors reacted badly to the company's poor interim result.

The drop in profit was due to Wrightson not being able to recognise tax benefits on Australian losses, the company said.

Mr Mercer said he thought the market had over-reacted to the result.

"The market tended to over-react to the abnormals, which were well-known anyway.

"We think the current operating business is still moving ahead strongly. There is strong growth already evident in the first couple of months and we haven't downgraded our forecasts following the interim," he said.

Among other stocks to gain, PDL Holdings, headed by chief executive Mark Stewart, put on 30c to $6.00 after jumping 50c on Monday.

Tourism Holdings was up 6c at $1.43, Tranz Rail gained 15c to $4.15, and Advantage Group was up 2c at $1.55.

Carter Holt Harvey and Fisher and Paykel also continued their strong run of late, adding 2c to $1.77 and 10c to $8.75 respectively.

AMP was also up 10c at $23.60 ahead of its full-year result today.

Heavyweight Telecom eased 5c to $5.22.

- NZPA