NZ shares mixed, NZOG gains on takeover

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New Zealand shares were mixed, with New Zealand Oil & Gas gaining on a partial takeover offer while CBL Corp and Goodman Property Trust fell.

The S&P/NZX50 Index fell 9.93 points, or 0.1 per cent, to 7,789.71. Within the index, 21 stocks rose, 15 were unchanged and 14 fell. Turnover was $137 million.

Arvida Group was the best performer, up 1.5 per cent to $1.32. Mercury NZ gained 1.4 per cent to $3.56 and Fletcher Building rose 0.9 per cent to $7.97.

Vital Healthcare Property Trust gained 0.4 per cent to $2.29. The listed hospital owner and developer increased annual earnings 54 per cent as it saw rental income grow in a year when it made seven major acquisitions, with its outlook strong for 2018.

Distributable earnings, the preferred measure for property investors because it strips out unrealised movements in the value of property, rose to $61.8m in the 12 months ended June 30, from $40.2m a year earlier. Net profit rose 86 percent to $217.6m, including a $168.5m gain on the value of Vital's property portfolio.

"I don't think it's any surprise, with property stocks you know what you're going to get," said Grant Davies, investment advisor at Hamilton Hindin Greene. "The key is the yield they can support, and they've probably got the lowest yields on the market at the moment."

CBL Corp fell furthest, down 1.8 per cent to $3.73, with Spark New Zealand down 1.8 per cent to $3.87 and Sky Network Television declining 1.5 per cent to $3.25.

Goodman Property Trust dropped 0.8 per cent to $1.27. The NZX-listed commercial and industrial property investor plans to spend $107m in six industrial developments in Auckland, saying it is intensifying activity in the city to meet demand. The six new projects will add 58,368 square metres of warehouse and office space to GMT's 1 million sqm portfolio, it said in a statement.

Outside the benchmark index, New Zealand Oil & Gas rallied 9.6 per cent to 68.5 cents. Zeta Resources, the ASX-listed investment group advised by Duncan Saville's ICM unit, is making a partial takeover offer for NZOG, offering a 15 per cent premium for shares in the oil and gas explorer.

Zeta Energy, a subsidiary of Zeta Resources, plans to offer 72 cents a share for 41.955 per cent of NZOG's fully and partly paid shares that it doesn't already own. The target company shares last traded at 62.5 cents.

"There's a bit of water to go under the bridge yet, but the market is starting to price in the likelihood of this occurring," Davies said. "We'll have to wait and see, but it's probably attractive enough to get people taking that offer."

Teamtalk gained 8.3 per cent to 78 cents. The network provider says full-year profit was between $4.7m and $5.1m, more than double the guidance it gave in March, largely reflecting the sale of 70 per cent of BayCity Communications to Vodafone New Zealand.