MARKET CLOSE: Shares fall as Z Energy drops from record, Infratil declines

New Zealand shares fell, with Z Energy declining as investors pocketed yesterday's gains, while Infratil, Kathmandu Holdings and DNZ Property Fund dropped after giving up rights to their dividends.

The NZX 50 Index slipped 5.037 points, or 0.1%, to 5858.706. Within the index, 25 stocks fell, 18 rose and seven were unchanged. Turnover was $163 million.

Z Energy, the petrol station chain, declined 2.9% to $6.02, paring back yesterday's 22% jump to a record close of $6.20. The chain, of which Infratil owns 20%, announced yesterday the acquisition of Caltex and Challenge! brands from Chevron in a $785 million deal after details leaked to the Australian market late on Friday. The deal is expected to be "earnings-accretive" from day one, adding 34% to earnings per share before counting anticipated synergy benefits of between $15 million and $25 million a year starting in 2017. The acquistion still needs Commerce Commission approval. 

"After yesterday's big improvement we've seen some profit-taking come in," Grant Williamson, a Hamilton Hindin Greene director, says.  "There are one or two concerns starting to emerge about what the Commerce Commission might think about the transaction. That's creating a little bit of selling in the stock, but it's well above where it was before the deal announcement was made."

infrastructure investor Infratil led the benchmark index lower, down 4%, or 13.5 cents, to $3.27. The stock advanced on Z Energy's news yesterday, but today shed rights to its 6.4 cents per share special dividend, and its 8 cps final dividend.

Kathmandu Holdings, the outdoor goods retailer, dropped 0.7%, or 1 cent, to $1.38, as it shed rights to its 3 cps interim dividend. DNZ Property Group slipped 1%, or 2 cents, to $2.07, as it also gave up rights to its 3.125 cps final dividend.

Vector was the best performer on the benchmark index, up 2.5% to $3.23. The Auckland gas and electricity distribution company has hired Goldman Sachs to review its gas lines business after an unnamed party expressed interest in buying its gas transmission businesses.

"If there is any liquidation of assets that could be a possible return to shareholders," Williamson says. "Investors have taken that positively, but it's pretty early days."

Fletcher Building fell 2% to $8.45. Sky Network Television, New Zealand's dominant pay-television provider, advanced 1.1% to $6.37.

Spark New Zealand, formerly Telecom Corp, rose for a fourth day, up 1.2% to $2.89.

(BusinessDesk)