Sanford shares surge as Ngāi Tahu fishes for value
New Zealand shares rose for a third consecutive session as Ngāi Tahu made an on-market bid for a minority stake in Sanford and Mainfreight moved towards $100 per share.
Wednesday, September 1st 2021, 6:55PM
by BusinessDesk
The S&P/NZX 50 Index rose 22.05 points, or 0.2%, to 13,243.49. Turnover was $222 million.
Fishery firm Sanford leapt 21.4% to $5.40 as South Island iwi investment group Ngāi Tahu Holdings attempted to buy up 20% of the company on-market for $5.50 per share.
Existing significant shareholder, Amalgamated Dairies, offloaded almost half its 11% stake, selling 5.6 million shares to Ngāi Tahu for $30.8m.
The buying interest comes the day after Sanford shares sank to their lowest since May, after reporting operating costs were higher than usual and profit margins were reducing.
Yesterday, the stock closed at $4.60 per share – down 12% year-to-date and almost half what it was worth prior to the pandemic.
Sanford chair Robert McLeod said the offer recognised the potential long-term performance despite the difficult conditions.
“Ngāi Tahu is one of New Zealand’s largest and most successful iwi investors, with a substantial stake in and knowledge of the seafood sector,” he said in a statement.
Ngāi Tahu Holdings chief executive Mike Pohio said the long-term outlook for the sector was underpinned by growing global demand for protein.
Mainfreight was closely watched today as its share price crept towards $100 for the first time.
Ultimately it fell short, closing at $98.52, up 4.8%, having traded as high as $99.78.
The firm was bolstered today by a trading update which showed a before tax profit of $142 million, up 83%, in the past 22 weeks.
The stock has also been added to FTSE’s small cap global index, which has pushed investors to buy shares ahead of the passive funds doing so on Sept 17.
Matthew Goodson, a director at Salt Funds Management, said because Mainfreight was a “tightly held” stock, the index-related buying was pushing the share price up more than it might in other companies.
“Mainfreight’s own performance is the number one factor –– due to their internal strategies and a fantastic backdrop –– and that’s been enough to push their size and liquidity up enough to get into the index,” he said.
Mobile marketing firm Plexure was put on a trading halt, at 54 cents per share, to allow them to complete a $15m capital raise at 52 cents per share.
The kiwi dollar rose 20 basis points, to 70.43 US cents, as rising inflation expectations and selling price intentions amplified calls for the RBNZ to begin tightening interest rates from October.
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