KEY POINTS:
Australian investment firm Babcock & Brown today secured a 6 per cent stake in old age home company Ryman, prompting talk of a full takeover bid.
Trading in Ryman topped market turnover yesterday with over 25 million shares traded and a further six million today.
The stock was up 25 cents to $2.35 today.
Babcock & Brown paid $2.10 per share, exercising an option to buy shares from South Island Maori tribe Ngai Tahu.
"The reason the stock is up is that Babcock & Brown have filed a substantial security holder notice this morning," said Goldman Sachs broker Jeremey Coe.
"They have exercised their call option on some of Ngai Tahu's holding and so obviously people are thinking that they are going to make a bid for the company."
Babcock took out an option agreement with Ngai Tahu on January 19 over 4.99 million shares (before Ryman's five for one share split on January 29).
Before the selldown, Ngai Tahu owned 12.5 per cent of the company, which is capitalised at just over $1 billion.
Mr Coe said a number of Australian investment and private equity company had shown interest in New Zealand aged care companies. Last year, Macquarie bought Metlifecare.
"Babcock is looking for a footprint in our market as well," he said.
"People have been waiting for something like this to happen with Ryman and now they have taken a 6 per cent stake and people will obviously assume they want to take it further."
Emerald Capital, controlled by high profile businesswoman Diane Foreman, vice President of the Business Roundtable, owns 16 per cent of the company.
Fund manager Axa owns 8.8 per cent, the Hickman family owns 7.2 per cent, and the New Zealand Superannuation Fund owns 4.8 per cent.
Ryman executives were not immediately available to comment.
Ryman shares have doubled in price from the start of last year.
- NZPA
