Bids keep market bubbling

Press, 2 November 1985, Page 22

Bids keep market bubbling

By

ADRIAN BROKKING

Corporate activity kept the New Zealand sharemarket on the boil this week and kept prices from falling. Barclay’s index of industrial shares rose 27.51 points in the first three days of the short week to peak at 1663.96 before dropping 7.67 points yesterday. The close of 1658.29 represents a rise of 1.2 per cent for the week, and 5.5 per cent above the most recent low point on October 18, just two weeks ago. In eight trading days the index recovered just on 100 points. Turnovers were substantially .higher for most of the week, but the value was at the normal level — reflecting the fact that much of it was linked to the bids for Horizon and Landmark, all relatively low-priced shares and options. The bullish trend of the sharemarket was also helped along by the fall in the New Zealand dollar, a slight easing of interest rates, and specula-

tion that overseas interests might be building a position in NZ Forest Products. The week’s corporate activity included: 0 On Tuesday the Auckland sharebroker Payne Belcher and Partners announced a market stand for 15 per cent of the capital of L. D. Nathan and Company, at 500 c a share. Although spoilers tried to drive up the price, which at one stage got to 515 c, they were on the whole unsuccessful, and the shareprice settled at 500 c. Nathan’s countered inter alia with the purchase of two Wellington finance companies, N.Z. Securities and Finance, Ltd, from Hallenstein Bros, and Odlins Finance, Ltd, from Winstone’s. However, the amalgamation of smaller financers makes a lot of sense in its own right. © On Wednesday Investment Finance Corp, Ltd, announced that it wanted to acquire up to 20 per cent of the capital of Landmark. Properties, Ltd, at 60c a share — a move that was welcomed by

Landmark’s chairman, Sir George Chapman. • Horizon Oil contributing shares jumped 16c to 36c, and the options 7c to 13c on Wednesday in response to a full take-over bid from Capital Markets, Ltd, an unlisted company in the Fay Richwhite Camp. If the bid succeeds, Capital Markets will have shareholders’ funds of about $6O million. Capital Markets will apply for listing and keep Horizon as a subsidiary. The parent company will trade in international capital market securities. The Horizon directors recommend acceptance. • The same day Hawke’s Bay Farmers Meat Company, Ltd (not on the stock exchange list) received a $7.8 million bid for 20 per cent of its capital from Advanced Meats, a Gisborne company, 50 per cent-owned by Wattle Indus-, tries. • The offer of Unity Group, Ltd, for the balance of all the shares in Chemby Industries, Ltd, was declared unconditional after 91 per cent accept-

ance. ® The Examiner of Commercial Practices has consented to a proposal for Equiticorp Holdings, Ltd, or Jedi, or Rainbow to acquire Omnicorp. © In another bit of financial conjuring Cleopatra, Ltd, which is controlled by Mr Peter Wise who is also chairman of Tag Corporation, Ltd, gained control of the Anthony group of companies; this, in turn, gives him direct control of Tag Corporation. © In a surprise move yesterday Steel and Tube, Ltd, announced that it would make a bid for the balance of the shares in Emco Group, Ltd, that it does not already hold. In July, Steel and Tube bought Brierley’s 40 per cent holding in Emco. The Emco directors have issued a "don’t sell’’ notice. © The market was even more surprised yesterday when it was announced towards the close of trading that Fielder Gillespie Davis, Ltd, the Australian flour miller,

starch and gelatine products manufacturer, pig ana poultry marketer, would make a simultaneous bid for Allied Mills, Ltd, and' Goodman Group, Ltd. Allied Mills, Ltd, which has been a take-over target several times this year, is a manufacturer of flour products and owner of bakeries, similar in composition but a little smaller than Goodman Group. It is a David-and-two-Goli-aths affair, as Fielder is by far the smallest of the three, and in fact amounts to a reverse take-over. If successful, Goodman shareholders will hold about half the shares of the new group, Allied Mills shareholders about one third, and Fielder shareholders the balance which would be about one sixth. Mr Pat Goodman would be invited to be the chairman of the new group, which would be roughly of a size between Fletcher’s and Brierely’s with many minor shareholdings in a 3e number of other comes.