re: takeover .... more rumours "Tyndall's Ward suggested Amcor...

re: takeover .... more rumours "Tyndall's Ward suggested Amcor might hold more interest for Hart after his company Rank Group took over New Zealand's largest timber company Carter Holt Harvey (NZX: CAH.nz) ."




Telecom NZ seen unlikely Burns Philp target

Thursday June 1, 2006, 1:37 pm



By Wendy Pugh

MELBOURNE, June 1 (Reuters) - Cashed-up Burns Philp & Co. Ltd. BPC.AX is unlikely to bid for Telecom Corp. of New Zealand (NZX: TEL.nz) (ASX: TEL.ax) , analysts and fund managers said after newspaper speculation that it was a target drove the telco's shares up more than 2 percent.


Burns Philp, majority owned by New Zealand's richest person Graeme Hart, is seeking an acquisition after raising A$3 billion ($2.3 billion) from spinning off its Goodman Fielder unit and selling its Uncle Tobys snacks division.

New Zealand's Dominion Post newspaper said on Thursday that Hart was looking at Telecom, the country's largest listed company, and at trans-tasman brewer Lion Nathan Ltd. (ASX: LNN.ax) .

Burns Philp was not available for comment.

Fund managers said the group was more likely to look at food companies in North America or Australian packaging group Amcor Ltd. (ASX: AMC.ax) .

Rickey Ward, joint domestic equities manager of Tyndall Investment Management in Auckland said he would be surprised if Hart moved to buy Telecom NZ, although he could be interested in parts of the business.

"I don't think anyone that I've spoken to today adds any credibility to that rumour," he said.

"They all believe that it's unlikely -- not impossible -- but unlikely that he'd be interested in the whole company, particularly when there's a regulatory cloud surrounding what's happening in that sector."

The speculation sent Telecom's shares up more than 2 percent in morning trade. The stock was up 2.2 percent at NZ$4.59 in afternoon trade in a wider market up 0.1 percent.

About 25 million shares, or about 1.3 percent of Telecom equity, changed hands in a block at the opening on the Australian exchange, where it was one of the most active stocks on the Australian exchange.

The block trade fuelled speculation that it was for Hart, but one fund manager said the lot was taken by a local institution.

Telecom shares have tumbled 18 percent over the past month after the New Zealand government said the carrier must open its local network to competitors to spur better broadband services.

Analysts said Telecom's strong market position and the potential to take costs out and improve the business would be attractive to Hart but the regulatory concerns and a NZ$12 billion Telecom enterprise value would be a deterrent.

Most analysts said Lion Nathan was also an unlikely target for Burns Philp as Japan's Kirin Brewery Co. 2503.T holds 46 percent of the brewer and has indicated that it is satisfied with its stake. Lion Nathan shares were flat at A$7.75 at midsession.

F. W Holst & Co. analyst David Spry said it would take a high price to encourage Kirin to sell.

"He would have to pay such a premium, I'm wondering if it would work," Spry said. "It would have to be a very attractive price to get someone to move, sitting on an asset like that."

Tyndall's Ward suggested Amcor might hold more interest for Hart after his company Rank Group took over New Zealand's largest timber company Carter Holt Harvey (NZX: CAH.nz) .

Others said Hart was more likely to be drawn to the wider range of opportunities on offer in North America, although Hart could be unpredictable.

"If I had to guess, I would have thought it would more likely be something food related in North America," Allianz Global Investors analyst Joh Snyman said. ($1=A$1.33) (Additional reporting by Sonali Paul in Wellington and Denny Thomas in Sydney)