Market close: Shares on the move, led by GPG and Heartland NZ

BUSINESSDESK: New Zealand shares rose as merger and acquisition activity lifted Guinness Peat Group and Telstra. Heartland New Zealand climbed after an overhang of shares was sold.

The NZX 50 Index rose 22.55 points, or 0.6%, to 3501.39. Within the index, 25 stocks rose, 15 fell and 10 were unchanged. Turnover was $90 million.

Shares in GPG rose 2.2% to 46 cents after it rejected a $A220 million full takeover bid for ClearView Wealth, the investment firm’s second-biggest asset, saying the price was “wholly inadequate”. It was offered 50 Australian cents a share.

"I guess it’s a sign that a few of its assets are in reasonable demand," said James Smalley, client adviser at Hamilton Hindin Greene. "It will be interesting to see if the bidder pays a bit more."

Tower, the insurance and wealth management firm, gained 0.7% to $1.58 after a disclosure by GPG earlier in the week that its holding had slipped to 33.6% from 34.99%. Guinness Peat is looking to exit its holding.

Telstra shares, which are listed in New Zealand and Australia, rose 0.8% to $4.97 in local trading. Vodafone has agreed to buy Telstra’s New Zealand business, TelstraClear, for $840 million, giving the British company a stronger base from which to challenge Telecom.

The deal is subject to approvals from the Commerce Commission, the Overseas Investment Office and the Ministry of Business, Innovation and Employment.

"In telcos it is often a question of economies of scale and that is obviously what Vodafone is looking to do," Smalley said. "I guess it does make sense – Telstra has been in New Zealand for some time and it hasn't worked."

Telecom rose 2.2% to $2.58.

The gainers were led by Heartland New Zealand, climbing 5.9% to 54 cents after Philip Carter, of Carter Group, emerged as the major investor in the would-be bank. He bought an $8 million stake from Pyne Gould’s Torchlight Investment Group.

"Perhaps the market has thought that a significant overhang has been removed," Mr Smalley said. "Investors are certainly voting with their feet to get into the stock."

Pyne Gould's shares fell 14.3% to 24 cents. The company's Perpetual Trust has been forced to freeze its $56.2 million mortgage fund after a surge in investors sought to pull their cash out amid increased scrutiny of the firm’s related party loans. The stock has shed about 17% this year.

Property for Industry, which has a portfolio of 49 industrial properties nationwide, fell 2.5% to $1.16, leading decliners on the NZX 50.

Kathmandu, the outdoor clothing retailer, slipped 1.4% to $1.44.