Takeover offer lifts share fund Marlin

NZX-listed share fund Marlin has been given its second boost within a week after another of its investment companies received a takeover offer.

Shares in the Fisher Fund-managed investment scheme rose 1c to 87c yesterday on news of an offer by the management of Chinese shoe retailer Hongguo International Holdings to buy out the rest of the company.

Fisher Funds is the largest shareholder in the company which it also invests in through its unlisted KiwiSaver growth fund and international growth fund.

The offer comes days after another of Marlin's investment companies, US-based Bare Escentuals, received a takeover offer from Shiseido.

Marlin portfolio manager Ken Applegate said the two companies represented 10 per cent of the $110 million portfolio by investment and was a high hit rate for the fund which invests in 34 companies globally.

Applegate said there had been an increase in corporate activity in the last six months, driven by cheaper debt and the need to look for growth.

"It's one of those perfect storm type situations. The central banks have pumped all this money into the system. The last couple of years has also seen companies bring down debt.

"Companies are now under-geared and governments are encouraging them to spend to boost the economy."

Applegate said companies were also looking at much lower growth expectations and one way to grow faster was to acquire other businesses.

Cadbury had kicked off the activity six months ago and other investors such as Warren Buffet were taking the chance to buy companies that were now being considered cheap.

Applegate said it had accepted Shiseido's offer to buy its shares in Bare Escentuals but was still considering the second offer to acquire the shares of Hongguo for Singapore $0.439.

"While a 37 per cent boost to returns is nice, we believe the long-term value of the company is much higher. The management of Hongguo clearly recognise this which is why they are seeking to take the company private," he said.