Market close: Pushpay surges amid investor frenzy over improved takeover offer

Pushpay climbed 17c or 13.82 per cent to $1.40 with 34.42 million shares worth $48.05m changing hands. Photo / NZME

New Zealand sharemarket’s nerves were soothed by a bumper profit from Fonterra and a new $1.6 billion takeover bid for Pushpay following another offshore banking scare and looming recession at home.

The S&P/NZX 50 Index fell sharply at the opening on concerns about the outlook for Switzerland’s second largest bank Credit Suisse, with its share price falling 24 per cent.

But following the Fonterra and Pushpay news the index found a spring in its step, rebounding impressively from a midday low of 11,529.95 and closing with a gain of 81.74 points or 0.7 per cent to 11,699.02. It was the biggest single-day rise for the index this month.

There were 61 gainers and 68 decliners over the whole market on volume of 65.34 million share transactions worth $189.42 million, led by hectic trading in Pushpay.

The New Zealand economy contracted 0.6 per cent in the fourth quarter ending December, much weaker than the Reserve Bank’s forecast of a gain of 0.7 per cent in gross domestic product (GDP). The third quarter (ending September) rise was revised slightly lower from 2 per cent to 1.7 per cent.

Greg Smith, head of retail with Devon Funds Management, said there was ironic relief on the market with the weaker-than-expected GDP number. “The economy has slowed more than the bank thought and it may be inclined to dial back its next official cash rate hike from 50 basis points to 25.”

Smith said the latest GDP number sets New Zealand up to enter a technical recession (two consecutive quarters of negative growth) earlier than expected, given the March quarter will be weak due to the floods and cyclone.

On Wall Street the Dow Jones Industrial Average was down 0.87 per cent to 31,874.57 points and S&P 500 declined 0.7 per cent to 3891.93 after Credit Suisse said it had found “certain material weaknesses in our internal control over financial reporting” for 2021 and 2022.

Its largest investor Saudi National Bank said it could no longer provide any more funding and the Swiss central bank announced it would give Credit Suisse liquidity if required.

New Zealand’s biggest company Fonterra Co-operative reported a 50 per cent surge in net profit to $546m for the six months ending January on the back of higher prices for protein products. Revenue was up 23 per cent to $13.25 billion. Fonterra Shareholders’ Fund rose 25c or 8.2 per cent to $3.30.

Fonterra is paying an interim dividend of 10c a share on April 14, alongside a forecast milk price of $8.20-$8.80 per kgMS. The co-operative upgraded its full-year earnings to 55-75c a share, from 50-70c, and announced a tax-free capital return to farmer owners and unit holders of 50c a share worth a total of $800m, subject to completing the sale of the Chilean Soprole business.

Donor software management company Pushpay Holdings topped the individual gainers and trading lists after telling the market it has received an improved takeover bid from investment firms Sixth Street and BGH Capital, at $1.42 per share and up from $1.34.

Pushpay climbed 17c or 13.82 per cent to $1.40 with 34.42 million shares worth $48.05m changing hands. This time the takeover looks like going through at the next shareholders’ meeting.

Pushpay said seven of its largest New Zealand institutional shareholders holding 18.6 per cent including ACC and NZ Super Fund – which voted against the initial offer – have indicated they will vote in favour of the new scheme of arrangement.

Smith said the higher takeover offer lined up better with the independent valuation report and “what’s interesting is that the arbitrage hedge funds, which bought in after the initial offer, are effectively subsidising the higher offer.”

Auckland International Airport increased 19c or 2.21 per cent to $8.77 after telling the market it is now operating up to 73 per cent of pre-Covid levels, with 1.427 million passengers moving through the terminals in January and 1.258 million in February.

Meridian was up 11c or 2.17 per cent to $5.18; Contact also gained 11c to $7.66; Infratil collected 19.5 per cent or 2.27 per cent to $8.78; Ebos Group improved 37c to $45.87; Summerset Group added 25c or 3 per cent to $8.59; and Scales Corp rose 13c or 3.99 per cent to $3.39.

PGG Wrightson was up 9c or 2.05 per cent to $4.48; Goodman Property Trust increased 4.5c or 2.21 per cent to $2.085; Rakon rebounded 2c or 2.41 per cent to 85c; and Vista Group gained 5c or 3.6 per cent to $1.44.

In the banking sector, ANZ was down 74c or 2.72 per cent to $24.55; Westpac declined 64c or 2.72 per cent to $22.86; and Heartland Group decreased 5c or 3.05 per cent to $1.59 on the back of the Credit Suisse scare.

Ryman Healthcare declined 9c or 1.8 per cent to $4.91; a2 Milk decreased 16c or 2.26 per cent to $6.93; Sky TV shed 4c to $2.45; and T&G Global was down 10c or 4.52 per cent to $2.11.

Other decliners were Vulcan Steel decreasing 24c or 2.81 per cent to $8.31; Bremworth shedding 1.5c or 4 per cent to 36; Allied Farmers falling 4c or 5.26 per cent to 72c; and NZX down 3c or 2.46 per cent to $1.19.