Stock takes: Caves owner subject of exploration from across Ditch

Some shareholders of Tourism Holdings have had an offer from Australia to buy shares at $1.05. Photo / Supplied

Tourism Holdings has been the subject of another potential bid from across the Ditch.

The Waitomo Caves owner told the market this week that an Australian accountancy firm had written to its largest shareholders offering to pay money for an option to buy the shares.

The institutions have shrugged off the offer of 1c per option to buy shares at $1.05 with a cut-off of April 30, while Tourism Holdings says it obviously comes from a very uninformed party who has no understanding of the New Zealand takeover code or normal rules governing an offer.

Usually an interested company would to talk to the board and management before approaching shareholders.

Stock Takes understands the offer came from a New South Wales business called Constantine Kambourakis & Co which does exist and that the offer was made on behalf of one of its clients.

Tourism Holdings chief executive Grant Webster says he rang the firm after finding out about the letters from one of its shareholders and the conversation was very formal and one way.

"I will be surprised if much more comes of it," he said.

The board has recommended shareholders reject the offer.

The $1.05 offer is above THL's current share price but well below its net tangible asset value of $1.37.

The last time the company had a serious bidder was in 2006 when the now collapsed MFS Living and Leisure made an offer that just fell short of gaining enough acceptances. Tourism Holdings shares closed up 1c at 96c yesterday.

SOUR GRAPES

Delegat's surprise 40 per cent forecasted profit downgrade last Friday has left a sour taste in the mouths of investors.

As of yesterday the shares in the winemaker had plunged 41c to $2.00 since the announcement and are down from a record high of $2.81 reached on January 28.

The group was one of the few darlings during the recession but it seems the glut of New Zealand grapes and currency headwinds has caught up to the company.

Chairman Robert Wilton told shareholders the imbalance in the wine industry was expected to lower grape prices for the 2010 harvest and hit the fair values of vineyards and their biological assets, resulting in a 30 to 40 per cent drop in profits. But so far the company intends to maintain its dividend payout.

Analysts appear divided over whether the news is all bad. Both First NZ's Jason Lindsay and Royal Bank of Scotland's Jason Oxley have maintained their buy recommendation on the stock while Forsyth Barr's Rob Mercer downgraded it.

While the fall in the stock price appears to have slowed, one commentator questioned whether it had hit the bottom yet, given the company would be facing big challenges over the next 12 to 24 months.

SMART SHOPPING

Children's clothing retailer Pumpkin Patch has made a strong recovery from the share price lows it hit during the height of the recession. At its worst, the shares were trading at just 79c but yesterday they were trading at $2.08.

Stock Takes reckons retail gurus Rod Duke and Jan Cameron will be patting themselves on the back after buying into the company at a time when others were bailing out. Duke, who owns a 9.4 per cent stake, paid an average of $1.60 while Cameron, who has 9 per cent of the company, did even better, buying in at an average of $1.01.

Fund manager Fisher Funds must be kicking itself after reducing its stake from 13.5 per cent to 6 per cent. The other major seller was our own taxpayer-funded New Zealand Superannuation Fund. The company this week revealed a half-year net profit up 50 per cent to $14.3 million.

IPO OVERLOAD

NZX chief executive Mark Weldon made big promises of new listings to come this year at the firm's annual result this week and reckons we could see the first one later this month or early next month.

South Island dairy company Synlait is widely expected to come back for a second tilt after its aborted attempt last year.

Others being talk about include private equity owned Yellow Pages Group which market commentators say is in trouble over a potential breach in its banking covenants, which the company has denied, a printing consortium and cinema business Hoyts.

BROKER TANGLES

Stock Takes understands there have been some unhappy faces in the investment banking team at Craigs Investment Partners as the company works on its tie-up with Deutsche Bank.

The deal, which has yet to be finalised, would leave the company with two investment banking teams and Craigs staff have been quick to do the numbers.

Stock Takes understands senior staff staged a walk-out last Friday over the deal and certain staffers have been making their move before they get the push.

Details of the deal have yet to be revealed but Deutsche is believed to be keen on taking a high stake although Craigs won't be wanting to give up control of the business so soon after getting it back from ABN Amro.

Meanwhile, rumours continue to circulate around a tie-up between Macquarie Group and Forsyth Barr.

Stock Takes understands there has been a meeting between the heads of Macquarie and Forsyth Barr in Sydney and the way may have been made easier by the departure of former New Zealand Macquarie chief John Rowley last year.

If the deal went ahead it could spell the end of another international investment banking presence in New Zealand as speculators believe it is likely to see Macquarie rolled into Forsyth Barr.

Macquarie, like other brokers, has faced tough times and the tie-up would give it a much stronger distribution arm in New Zealand and help stem the tide of red on its books.

A spokesperson for Macquarie said the company did not comment on market speculation.

REVERSE FORTUNES

GPG's New Zealand investors have breathed a sigh of relief after assurances from Sir Ron Brierley's Guinness Peat Group that moves to "return value" to shareholders will be forthcoming.

The bonus was promised before the recession hit but the company had begun to waiver on its resolve as GPG, and in particular its thread business Coats, came under fire. GPG's share price rose 10c on the news this week up from the 82c it was trading at before its half-year result.

But some in the market have questioned where GPG will find the money.

A potential sale of Coats has been in the offing for some time but some analysts believe that it is unlikely that GPG will ever make a lot of money on it because of the logistical challenges involved in running a business which operates across five continents.

GPG's share price closed at 92c on the NZX yesterday.