Two takeover moves and a possible sell-down make for intriguing day - Market close

Port of Tauranga was down 11c or 1.98 per cent to $5.44 after it was reported that Bay of Plenty Regional Council was reviewing its major shareholding. Photo / Alex Cairns

The New Zealand sharemarket slipped nearly half a per cent in a day of volatility and intrigue, with two takeover moves and a significant shareholding sell-down in the offing.

The S&P/NZX 50 Index traded in a range of 11,507.41 and 11,422.87 before settling at 11,449.47, down 46.17 points or 0.4 per cent.

There were 65 gainers and 52 decliners on the main board with 20.62 million shares worth $72.49 million changing hands.

Advanced manufacturer Rakon received an unsolicited takeover proposal at nearly three times its then trading price. Rakon, which manufactures advanced frequency control and timing solutions, was trading at 62c when it went into a trading halt.

Late in the day, Rakon told the market that the proposal came from a credible industry player at $1.70 a share. “The proposal is incomplete and highly conditional and, as a result there can be no certainty that any transaction will eventuate.”

When its trading resumed in the last hour, Rakon’s share price shot up 58c or 93.55 per cent to $1.20 on 51 trades worth $215,186.

Matt Goodson, managing director of Salt Funds Management, said “we can assume the takeover proposal is from an overseas player and if a formal bid crystallises, then it is significantly above Rakon’s share price.”

The NZX is likely to have an artificial intelligence stock on its main board. Ascension Capital is being used as a reverse listing for developer Being AI whose early-stage businesses have a valuation of $45m (on completion date).

The Being owners will be issued with 1.8 billion shares at 2.5c a share and Ascension will undertake a capital raising to fund growth. A shareholders’ meeting will be held in March to approve the deal. Ascension, virtually a shell company, is now in a trading halt and last traded at 1.5c.

Port of Tauranga was down 11c or 1.98 per cent to $5.44 after it was reported that Bay of Plenty Regional Council was reviewing its major shareholding, valued at around $2b.

The council, which holds 54 per cent in the port company through Quayside Holdings, said it would retain a minimum floor shareholding of 28 per cent, whatever comes out of the review.

Goodson said interestingly, there is a provision in the listed Quayside bonds that if the council sells below 50 per cent, then the bonds are put back to 100c in the dollar - $200m of them are presently trading at 87c. “I guess the provision is a form of security for the bondholders.”

Fisher and Paykel Healthcare was down 40c to $23.60; Mainfreight fell $1.20 to $67.30; Mercury Energy shed 6c to $6.26; a2 Milk declined 11c or 2.49 per cent to $4.30; and Heartland decreased 3c or 1.82 per cent to $1.62.

Steel & Tube increased 3c or 2.94 per cent to $1.05 after confirming that first half operating earnings (ebit) was on track at $10m-$11m, last year at $10.6m, despite challenging trading conditions. Steel & Tube is giving all permanent staff 70 shares each as part of its 70th anniversary.

As Christmas shopping gets into full swing, Briscoe Group was down 14c or 2.99 per cent to $4.55; Hallenstein Glasson declined 12c or 2.11 per cent to $5.58; and Michael Hill was up 2c or 2.33 per cent to 88c.

Precinct Properties, up 2c to $1.20, is selling the Mason Bros Building in the Auckland Wynyard Quarter innovation precinct for a discounted $50.3m. In Precinct’s latest annual report, the building had a valuation of $58m.

Other property companies Investore was up 3c or 2.8 per cent to $1.10, and Vital Healthcare Trust gained 4c or 1.94 per cent to $2.105.

Turners Automotive was up 9c or 1.94 per cent to $4.72; PGG Wrightson rose 16c or 4.86 per cent to $3.45; NZME collected 4c or 4.65 per cent to 90c; and Eroad rebounded 5c or 5 per cent to $1.05.

T&G Global rose 14c or 7.37 per cent to $2.04; Napier Port increased 11c or 4.7 per cent to 2.45; 2 Cheap Cars added 2c or 2.33 per cent to 88c; and NZ Oil & Gas was up 1.5c or 4.41 per cent to 35.5c.