STILL KICKING ...
The tyres, that is. At least that is what we are being told about the long-running sale of Restaurant Brands.
The company promised a definitive call on sale prospects by the end of the month and, despite delivering its full audited result yesterday, chairman Ted van Arkel maintains he won't talk about the sale process until April 30. It could be that final talks are going down to the wire, although there are few in the market who view the situation with that much optimism.
The last potential buyer - likely to be CVC Asia Pacific - must surely be tempted to drop out and come back for another go on its own terms when a few issues have been resolved. The share price has already sagged to pre-takeover talk levels and may sink further if the sale process is declared a failure. That would make the prospects for a hostile bid pretty good.
It is also likely that prospective buyers would rather wait and see if the turnaround at KFC can be maintained, and if there is any hope of a similar revival for Pizza Hut, before they make a commitment. If the company can continue to make some operational progress then revived sale prospects might not be so bad in the long run. Restaurant Brands shares closed at 92c yesterday.
A small announcement from the NZX this week could mean big changes to the way shareholders get the lowdown on a company's progress. Basically, the NZX is bringing its regulations in to line with changes to the Companies Act so that - in theory at least - big glossy annual reports could be a thing of the past.
One reader was quick to point out all publicly listed companies should be encouraging shareholders to opt for electronic reports - from an environmental and financial perspective. But companies also needed to ensure that the electronic reports are user friendly: "Simply reproducing a multi-column report for reading on a computer monitor is a sign of laziness." Which is a fair point, although there are also plenty of shareholders out there who still like to get the full report in the mail.
The economic practicality of printing reports for all shareholders will vary from company to company.
But, as the NZX's Elaine Campbell points out, shareholders will have the right to tell companies what they want. Making that clear in no uncertain terms is the key to making this change work.
AIR NZ EFFECT
It's great to see a soaring local stock impacting on valuations in Australia. It's usually the reverse of course, with anything the Rinker takeover deal to the Coles furore prompting New Zealand investors to reassess relevant values on this side of the Tasman.
But Australian commentators seem to have noticed that Air NZ's stellar run is making the Macquarie-led consortium's bid for Qantas look a bit ordinary.
The Sydney Morning Herald this week noted that Qantas shares had risen 28 per cent since rumours of the private equity bid began to circulate last November. But Air NZ shares have doubled in the same period, the paper notes. Ironically, it was the takeover bid for Qantas that was originally tipped one of the reasons for the resurrection in Air NZ's market value.
But a strong operational performance combined with some relief on the fuel price front seem to have left that theory back on the tarmac. In fact Air NZ has now risen 158 per cent since it bottomed out at $1.08 last August. Shares closed up 12c at $2.79 yesterday.
Meanwhile, still on an aeronautical theme, Infratil - owner of Wellington Airport and enthusiastic "would-be" developer of Whenuapai Airport in Auckland's north west - is more than a little miffed at the news that Auckland International Airport (AIA) has been funding local opposition to the development.
Infratil director Tim Brown has found a story in community newspaper the North Shore Times which says AIA has provided Whenuapai Action Group with $19,000 to fight plans for the airport.
Infratil has long expressed interest in developing the old airforce base at Whenuapai as a second commercial airport for the region.
Brown says he now intends to check the legality of the funding relationship. "It is hard to see how it would be in the spirit of the Commerce Act to be funding a vociferous group opposed to the establishment of a competitor," he says.
"At least the AIA team are not the Brethrens, so are probably not praying for divine intervention on their side."
Guiness Peat Group has built a war chest of more than $700 million which it is likely to spend on a new acquisition, concludes Goldman Sachs JBWere analyst Rodney Deacon in his latest report on the listed investment company. Deacon has taken another look at the group in the light of last week's sale of the Australian Wealth Management (AWM) business - which has delivered the investment company a cool A$267 million.
The timing of the AWM sale was in itself a little surprising, Deacon noted. He bases his view on the belief that the Australian wealth management industry is generally considered to be in a growth phase with potential for further consolidation. AWM was also still in the process of integrating the Select Funds business and the corporate superannuation business it had acquired from Zurich Financial and Genesys. "We think it is questionable whether the full benefit of these transactions has been fully factored into the share price," Deacon writes.
And no reason for the sale was provided by GPG management. The only logical reason for sale is a belief on GPG's part that Australian equities are near a peak.
The question now is what will GPG do with the proceeds - which take the amount of cash on the balance sheet to more than $700 million by Deacon's calculation. The Coates business is now largely self-funding and none of its other businesses need the capital. That makes a fresh acquisition the most likely option.
GPG shares closed up 1c at $2.33 yesterday.
TESCO IN THE WAREHOUSE RACE ...
The race for The Warehouse (due to get the starter's gun today, Commerce Commission willing) looks set to get more crowded.
Well-placed market sources say investment bank Merrill Lynch has hit town, hired by British grocery giant Tesco to scope out the Red Shed auction.
Tesco has long been tipped as potential buyer, with rumours dating back to a supposed meeting during Stephen Tindall's UK visit last year.
But just how Tesco might fit into a potential bidding war remains unclear.
Also this week, sources in the Australian media linked Tesco to a Woolworths bid for Coles, so it looks increasingly like there is some big-picture stuff going on behind the scenes. Tesco management has been highly public about its aggressive international expansion plans in the past year. Foodstuffs and Woolworths have been in the starting blocks for months.
Today is the Commerce Commerce's third deadline for ruling on who is allowed to buy. But considering what's at stake it would be thoroughly unsurprising if the runners are once again left waiting for another month.
Meanwhile, in the calm before the storm ... trading in The Warehouse shares has slowed to a near standstill. The share price has drifted sideways from a $7.11 close last Friday to yesterday's close of $7.10.
OLD DOG DOES NEW TRICKS
Stalwart Wellington retailer Kirkcaldie & Stains sometimes looks like a bit of a throwback on the NZX.
It all seems a bit Are You Being Served? in these days of global retail conglomerates. But Kirks is obviously doing something right because its shares hit a three-year high this week. On Tuesday the company reported its half-year profit had more than doubled to $747,000, allowing it to resume paying dividends.
Strong Christmas and summer trading, including the end of season sale, boosted sales by 11.5 per cent to $22 million, the company said.
The store has expanded from its traditional Lambton Quay home and now has a cuisine store in Wellington's Harbour City Shopping Centre.
It's also worth noting that the canny Sir Selwyn Cushing and his family investment company H&G took a five per cent stake last year. And a group of Wellington property investors trading under the name LQ Investments has held a 19.9 per cent stake since March last year.
So it could be that new strategic stakeholders have provided management with some fresh motivation. The shares closed up 10c yesterday at $3.10.