MARKET CLOSE: Shares rise; Kathmandu soars on Briscoe takeover; MRP, Contact advance

New Zealand shares rose, led by Kathmandu Holdings after Briscoe Group flagged takeover plans. MightyRiverPower and Contact Energy advanced as investors bought defensive stocks.

The S&P/NZX 50 Index rose 21.15 points, or 0.4%, to 5726.96. Within the index, 23 stocks rose, 15 fell and 12 were unchanged. Turnover was $198 million, with $58 million of that made up of Kathmandu shares. 

Kathmandu soared 26% to $1.75, retreating from an intraday climb to a four-month high of $1.80, after Briscoe acquired a 19.9% stake and said it plans to make a full takeover, raising the prospect that managing director Rod Duke could use his skills to revive the struggling outdoor equipment and clothing chain. Mr Duke owns about 80% of Briscoe and under his leadership the retailer's shares have climbed 130% in the past five years as he drove sales growth at his homeware and sports goods stores. 

Outside the benchmark index, Briscoe rose 1.8% to $2.90. 

"It will be interesting to see what the actual offer is going to be and what sort of split it will be between scrip and cash," James Smalley, director at Hamilton Hindin Greene said. "Briscoe has tended to be quite an illiquid share because it is very tightly held by Mr Duke. He's obviously an expert on retail, he has been through a number of retail cycles and done very well with Briscoes."

The benchmark index clawed back some of yesterday's 0.9% decline to a five-month low when the failure of Greece to seal a deal with its creditors over the weekend surprised global markets. Investors bought defensive stocks as volatility is expected to continue. 

MRP, the state owned energy generator and retailer, advanced 3.7% to $2.79. Contact, the utility company, rose 2.2% to $5.01. SkyCity Entertainment Group, the casino operator, gained 1.5% to $4.20. Fletcher Building, the construction and building supplies firm, increased 0.4% to $8.12. 

"It's a bit of a bounce back here at the moment," Mr Smalley said. "Once the initial inevitable selldown occurred, people are taking stock and seeing that possibly the pressure on the Greek government might lead to something. Maybe people are looking past this Greece thing to what's going to be happening domestically over the next six months and using this little bit of a sell down on macro issues to look more at the micro and try and pick up a few stocks while they've been sold off a bit."

Tower rose 1.9% to $2.20 after it said it extended chief executive David Hancock's contract by three months, keeping him on deck as the general insurer wraps up a number of business initiatives.

Spark NZ, formerly Telecom Corp, rose 0.5% to $2.795. Auckland International Airport advanced 0.1% to $4.935.

The worst performer on the day was Orion Health Group, the healthcare management software system, down 2.4% to $4.01.  

Outside the benchmark index, TeamTalk shares dropped 6.3% to 75c after the telecommunications company warned net profit will be hit by a revaluation of interest rate swaps and said it had reduced the size of its debt facility after extending the credit line for three years.

(BusinessDesk)