Now that Foodstuffs has got its 10 per cent, is it game over for suitors of The Warehouse?
Not likely say those who have been following the action closely. Foreign players like Toll have no problem controlling New Zealand's rail and ferry system with an 84 per cent stake so having to settle for a majority stake is not likely to deter the bigger international retail players.
The real question remains the mood of Stephen Tindall. So far he is sticking to his guns and continues to resoundingly reject all offers. But that doesn't mean the right suitor, with the right attitude (and the right price) couldn't tempt him to the negotiating table.
Given Tindall's patriotic streak, one scenario that might work is a local hook-up. Foodstuffs boss Tony Carter denies there is any plans to launch a takeover but what we could see is Foodstuffs slowly build a big enough stake to start talking mergers with Tindall.
Meanwhile, The Warehouse's profit outlook upgrade yesterday might look cruelly timed for investors who had just sold to Foodstuffs. The shares jumped back above $5 and closed at $5.04 yesterday. But given that most of the big sellers that got Foodstuffs over the line were hedge funds let's not shed too many tears.
You can be sure they won't stop watching this one.
Holding the line
With the last vestiges of listing excitement gone, and the threat of regulatory intervention now built in, Auckland lines company Vector seems finally to have found its rightful place as a boring but safe investment.
At least that is a view being taken by Goldman Sachs JBWere, which has revised its recommendation to "market perform" in the short term and "hold" in the long term.
Goldman has a valuation of $2.50 on the stock, which closed at $2.49 yesterday.
The reason for the previous "underperform" recommendation was the lack of obvious demand support for the stock.
Neither the yield nor growth outlook were particularly compelling for retail investors and the "regulatory" noise was too great for offshore investors.
The shares were issued last year at $2.38 but heavy demand saw them soar to as high as $3.34.
They have now tracked back far enough to put the yield in line with other defensive stocks, Goldman says.
The cold winter is providing some short term good news. Demand for electricity is up. Goldman estimates that a 1 per cent change in electricity volume demand equates to a $3.2 million lift in profit for Vector.
On the regulatory front, the most serious threat remains the 2009 electricity threshold reset. A conservative outcome for that process appears to be priced in.
Low vibrations
There are low-level vibrations emanating out of Australia that energy giant AGL would be happy to step into the brink if a disgruntled and cash hungry Origin should decide to exit its 51 per cent stake in Contact Energy.
Origin - which dropped its Contact merger proposal in the face of strong local opposition - is in need of some serious cash to participate in industry privatisation across the Tasman and to invest in new generating capacity.
Could it be time to cut its losses in New Zealand? AGL was one of the front runners for the controlling stake which US company Edison Mission eventually sold to Origin. In the short term it won't come as any surprise if Contact moves to increase dividends and makes some cash returns to shareholders. Something that would suit Origin to a tee. Contact shares closed at $7.15 yesterday
Finance failures
With all the negative talk about finance companies lately it would be easy to think the whole sector was about to collapse. But what we will see is a "flight to quality", says Mark Lister of ABN Amro Craigs.
For proof that some players are still in the money, take a look at Pyne Gould Corporation (PGC). The owner of Marac and Perpetual Trust reported last week that it will beat last year's profits. That's despite the fact that it also owns 22 per cent of listed rural service company PGG Wrightson - which downgraded its profit outlook (on the same day) due to the lousy winter.
Marac was still experiencing strong growth in the commercial finance sector (plant and manufacturing equipment) and good demand in the property sector. Perpetual Trust continued to grow revenue and was expected to report record returns this year, the company said.
PGC shares have risen 23c since June 29 to close at $4.18c yesterday.
Fishing for staff
Word is that Terry Tolich, one of Goldman Sachs JBWere's senior analysts (with a reputation for being very thorough and very serious) is jumping ship and will shortly join the growing team at Fisher Funds. Nice catch.
Happy Anniversary
This month Telecom celebrates 15 years on the stock exchange. Never mind the last three months, that's a great effort. May the next 15 be just as interesting. Telecom shares dip-ped back below the dreaded $4 mark yesterday and closed the day at $3.99.
Where's the money?
With cash floating about from the Waste Management sale and plenty of investors still cutting their losses and ditching Telecom, it's not surprising that a few stocks have managed to shine through the general market malaise in the past few weeks. Fletcher Building has bounced back from its short dip below $9. It closed at $9.30 last night, up from the $8.45 it hit on June 15.
Although there has been nothing specific from an operational point of view to trigger the rally it has to be noted that building consent figures have been better than expected. The company reports on August 9 and results are expected to be in line with forecasts.
GPG has also been on a good run. Since convincing the Government to exempt it from the new investment tax regime the stock has risen from $2.38 to close at $2.58 yesterday. In fact its been an excellent year for Tony Gibbs and co. The stock is up nearly a dollar since mid-December when it was traded at $1.80. Mainfreight has also continued its bull year in the past two weeks. On June 21 it traded at $5.31 and ended yesterday at $5.95.
A road-use report which predicted freight volumes will double in the next 15 years won't have hurt.
Healthy profits for Lane
He isn't exactly in the same league as billionaire Graeme Hart, but fellow rich lister Gary Lane (NBR has him valued at $225 million) could soon be largely cashed up.
With private equity funds seemingly in "buy at all cost" mode, it makes good sense for him to follow the Burns Philp lead and sell the food group Hansells and the health products group Healtheries now. Lane can keep his cash on hand in expectation of a few bargains presenting themselves in the coming year as the economy continues to cool. There are already a few finance company assets floating around, for example.
Lane sold a couple of brands of chips to Burns Philps Bluebird group last year. But the rest of Hansells' familiar Kiwi brands (baking powders, essences and fruit juices) would sit more comfortably with Goodman Fielder (Commerce Commission willing). Expect Pacific Equity Partners to be checking it out for synergies with its freshly acquired Griffins brands.
Meanwhile, on the Graeme Hart front, a keen waterfront observer notes that Hart's luxurious floating office has been berthed in Auckland Harbour since the start of the year. Does this mean Hart is also spending most of his time on this side of the Tasman?
Carter Holt Harvey will be consuming some of his time, but what else could Hart be cooking up that requires so much time in his home town?
Thank heavens
No matter what goes wrong for Air NZ in the next few months, at least members of the management team can take a deep breath, smile and say: At least we didn't buy the A380. As the French Airbus giant faces delays of up to a year and the team that oversaw its development goes into a tail spin, Qantas has joined Emirates, Singapore Airlines, Air France and Virgin Atlantic in seeking penalty payments for late delivery of its 12 planes.
<i>Stock takes:</i> Game Over?
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