Kidicorp picks management deal behind share drop

A sudden drop in the price of shares in childcare centre operator Kidicorp has prompted a "please explain" from the New Zealand Exchange. The shares have fallen 26 per cent, or 6c, since March 10, leading NZX to ask if the company has complied with continuous disclosure rules.

Kidicorp company secretary Bruce Woodward responded, saying the directors have disclosed all relevant information and are not aware of any reason behind the recent decline.

"However, they suspect that it may be a consequence of the earlier announcement on February 25 that the company had terminated the management agreement entered into between Kidicorp and Peppercorn Management Group of Australia," he said.

The agreement, under which Peppercorn managed childcare centres in New Zealand owned by Kidicorp, was terminated after Australian company ABC Learning's takeover of Peppercorn.

Woodward said ABC also owned, and was acquiring, childcare centres in New Zealand and Kidicorp directors did not think it appropriate that ABC continued as a competitor and manager of Kidicorp's centres.

Kidicorp shares closed 3c higher at 20c last night. They have traded between 16c and 30c in the last year.

* New Zealand Finance Holdings is also under scrutiny, with the NZX querying a 20c a share price rise to $1.05 on Monday afternoon from Friday's close.