Market close: NZ shares flat despite A2 Milk surges on takeover talk

Rumours of takeover activity boosted shares in the a2 Milk Company ahead of its result next week.

Global marketer a2 Milk surged on takeover talk, Ryman Healthcare got some welcome support but the New Zealand sharemarket couldn't hold on after a late fall.

The S&P/NZX 50 Index had steadily traded in positive territory for much of the day before the sharp drop in the last hour of trading, driven down by leading energy stocks.

The index fell 43.91 points or 0.34 per cent to 12,720.15 after reaching an intraday high of 12,804.19. There were 50 gainers and 88 decliners over the whole market on volume of 180.8 million share transactions worth $181.67m.

The Japan Nikkei 225 Index and Hong Kong Hang Seng fell sharply after their openings, the Nikkei down 1.71 per cent to 27,498.60 points and Hang Seng declining 0.92 per cent to 26,148.28 at 6pm NZ time.

The a2 Milk Company, which reports its latest financial result on August 26, rose 72c or 11.37 per cent to $7.05 after The Australian newspaper reported it is in the takeover sights of an overseas buyer, with multi-nationals Nestle and Kirin Lion being mentioned.

Shane Solly, portfolio manager with Harbour Asset Management, said a2 Milk has had suitors in the past but the price then was too high. Its share price has fallen from $21.50 in mid-August last year.

Retirement village operator Ryman Healthcare was up 50c or 3.6 per cent to $14.40, its highest close in three months, following a broker upgrade.

Solly said there was good demand for retirement villages and the broker still sees growth in them, particularly with Ryman's development in Australia.

Sydney Airport received an increased takeover offer, from $A8.25 ($NZ8.61) to $8.45 ($8.82) a share, from a consortium of Australian super fund investors but this was rejected.

Auckland International Airport was unaffected, and in fact fell 14.5c or 1.89 per cent to $7.14.

Solly said "we are seeing a stream of merger and acquisition activity. It's a noisy market with a lot to digest over the next few weeks as companies report their latest earnings."

Contact Energy slipped 2c to $8.13 after reporting a 49.8 per cent increase in net profit, from $125m to $187m, on revenue of $2.573 billion, up 24.1 per cent, for the 2021 financial year ending June.

Contact's operating earnings (ebitda) were up 24 per cent to $553m and it is paying a final dividend of 21c a share on September 15. Broadband connections grew to 50,000 over the year.

Other energy stocks were also down. Meridian declined 11c or 2.14 per cent to $5.03; Mercury shed 16.5c or 2.4 per cent to $6.72; and Genesis decreased 4c to $3.33. Trustpower, however, gained 7c to $8.12.

Market leader Fisher and Paykel Healthcare fell 58c or 1.83 per cent to $31.05; Ebos Group was down 30c to $31.20; Freightways declined 16c to $12.80; Port of Tauranga decreased 7c to $7.07; and fellow port company Marsden Maritime Holdings shed 9c to $6.06.

Infratil fell 17c or 2.26 per cent to $7.34; Hallenstein Glasson was down 13c or 1.86 per cent to $6.87; Vista Group shed 6c or 2.52 per cent to $2.32; and Pacific Edge declined 4c or 3.2 per cent to $1.21.

ANZ Banking Group fell 86c or 2.78 per cent to $30.07 after an Australian broker said the bank faced some pressure in its trading market and put a "sell" on the stock.

Other decliners were Harmoney, down 4c or 2.06 per cent to $1.90; Scott Technology losing 4c to 2.97c; Gentrack falling 9c or 4.35 per cent to $1.98; ArborGen Holdings decreasing 2c or 6.25 per cent to 30c; hospitality group Savor down 3c or 5.45 per cent to 52c; and PaySauce shedding 1.5c or 4.48 per cent to 32c.

Online marketer Plexure Group rose 5c or 9.26 per cent to 59c after telling the market it is buying Australian transaction platform Task for $A120m ($NZ123m) – with Task shareholders having 42.9 per cent of Plexure after issuing new shares. Task boss Daniel Houden will take over as Plexure's chief executive to replace Craig Herbison who resigned.

PGG Wrightson rose 14c or 3.97 per cent to $3.67; Synlait Milk was up 3c to $3.52; and Smartpay Holdings collected 3c or 3.95 per cent to 79c.