Market Close: $3b takeover offer for Tilt Renewables adds spice to local sharemarket

A $3 billion takeover of wind farm specialist Tilt Renewables involving Mercury Energy and an Australian investment group added spice to the New Zealand sharemarket, which had a sharp rise of more than one per cent.

The S&P/NZX 50 Index rose 165.49 points or 1.33 per cent to 12,592.26, and has now surged more than 2.5 per cent over the last two trading days. There were 94 gainers and 52 decliners over the whole market, with 45.66 million shares worth $164.45m changing hands.

Dan Stratful, investment adviser with Forsyth Barr, said the market had a recent pull-back, with a 10.5 per cent correction and perhaps it might be over.

“The property stocks are enjoying a bounce back, Fisher and Paykel Healthcare had a big fall and is seen as a buying opportunity, and people are seeing some value in the [border] re-opening stocks. They have been battered by the Covid pandemic and there had to come a time when investors rotated and started buying them,” Stratful said.

Market leader Fisher and Paykel Healthcare rose $1.24 or 4.26 per cent to $30.38 on trade worth $20.5m after reaching more than $37 last year.

Re-opening stocks such as Auckland International Airport was up 15c or 1.99 per cent to $7.70 after hitting $6.75 on February 19; SkyCity Entertainment increased 3c to $3.35; Tourism Holdings climbed 10c or 4.44 per cent to $2.35; and cinema software firm Vista Group continued to move, gaining 8c or 4.32 per cent to $1.93.

Stride Property rose 2c to $2181; Precinct Properties was up 4c or 2.53 per cent to $1.62; and Goodman Property Trust gained 1.5c to $2.215.

Stratful said the property sector may have been over-sold recently. Share prices were trading 10-20 per cent above their net tangible assets but the gap has now narrowed. Goodman, for instance, had a strong revaluation gain last week and the margin is now 4 per cent.

There was plenty of action in the Infratil camp. Tilt Renewables, 65.5 per cent owned by Infratil, climbed $1.13 or 17.44 per cent to $7.61, just short of the $7.80 a share takeover offer, worth $2.96b. Utilities investor Infratil rose 26c or 3.61 per cent to $7.46.

Mercury, which increased 3c to $6.03, is planning to buy Tilt Rendewables’ New Zealand wind farms, and Powering Australian Renewables (PowAR) wants to take over the operations across the Tasman.

PowAR, established in 2016, is a partnership between utility AGL Energy, Australian alternative investment manager QIC, and sovereign wealth Future Fund. An investor who bought into Tilt when it demerged from Trustpower in 2016 will have made a 40 per cent a year return, including dividends, with the takeover likely to proceed.

Mercury, which has a 19.92 per cent stake in Tilt Renewables, is offering a 5.5-year green bond of up to $200m and the fixed interest rate will be set on March 19. Amongst the other energy stocks, Contact gained 4c to $7.24 and Meridian rose 4c to $5.81, while Genesis Energy was down 4.5c to $3.835.

Freightways rose 26c or 2.41 per cent to $11.05; Summerset Group Holdings increased 13c to $13.08; Serko gained 18c or 3.16 per cent to $5.88; Restaurant Brands collected 22c to $12.92; and Hallenstein Glasson was up 24c or 3.38 per cent to $7.34.

Scales Corporation gained 17c or 3.99 per cent to $4.43; and innovative Scott Technology increased 8c or 3.81 per cent to $2.18.

South Port New Zealand surged 42c or 4.98 per cent to $8.85 after announcing it is taking delivery of a $9.4m tractor-drive tug for its Bluff operation – the company’s single largest capital expenditure item since it was established in 1989. The port’s three tugs will have a combined bollard pull of 105 tonnes.

Marlborough Wines Estate, which recently raised $1.34m at 25c a share, fell 11.5c or 25 per cent to 34.5c.

New listing Third Age Health Services also had a big fall, down 20c or 7.94 per cent to $2.32. Mobile marketing firm Plexure Group declined 3c or 3.23 per cent to 90c.

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