GDC asked to explain share price leap

The stock exchange  disclosed last Friday that it delivered a "please explain" note to telecommunications contractor GDC Communications about its share price leap.

NZX solicitor Damas Potoi sent the note to GDC after a 21 per cent rise in its share price on Friday.

"We note that GDC Communications [GDC] shares were traded at 12.40pm this afternoon on the NZSX Market at 19.9c a share," the exchange said. "This is an increase of 3.4c a share [21 per cent], since market close yesterday.

"Additionally, the volume of shares traded so far today [about 250,000 shares] greatly exceeds the usual daily volume over the last three months."

GDC managing director Geoff Lawrie responded that the company had a publicly declared strategy from last year to focus on growth within its business, with acquisition as one vehicle to achieve this.

"GDC has been and is in active discussions with a number of parties from which an acquisition, merger or strategic relationship may result."

The company said it would comply with continuous disclosure responsibilities and would "advise NZX of relevant material developments (if any) from such discussions".

GDC shares have continued to climb in price on unusually high volumes. The shares tumbled in late 2003 after it lost core field and maintenance contracts with Telecom worth about $38 million a year in revenue.

GDC later made a $3 million rights issue.

- NZPA