MIDDAY UPDATE: Endace gets takeover approach; kiwi gains

Dec. 6 (BusinessDesk) – Emulex, the NYSE-listed data storage maker, offered to buy Endace, at a 69 percent premium to its last trading price, winning over the target company’s independent directors.

A subsidiary of Emulex, El Dorado Research Venture, plans to offer 5 pounds a share cash for Endace, the New Zealand-based, London Stock Exchange listed company that commercialised cyber-security research done by Waikato University. The offer values Endace at 80.7 million pounds.

Shares of Endace last traded at 295 pence on London’s AIM market and have declined 43 percent in the past year.

The independent directors support and have committed to accept the offer and recommend it to shareholders, pending an independent assessment from Grant Samuel, the company said.

“I believe this is a compelling offer for Endace and its shareholders,” said deputy chairman John Scott. “As a relatively small independent technology company competing in a large and growing market, joining forces with Emulex makes excellent sense and is a very satisfactory outcome to the process of evaluating our strategic options.”

The deal is subject to consent from the Overseas Investment Office and the Ministry of Business Innovation and Employment in respect of certain grants, it said.

NZ dollar jumps after Wheeler gives more hawkish MPS

The New Zealand dollar rose after Reserve Bank governor Graeme Wheeler kept his forecast track for interest rates almost unchanged and gave no signal there’s room for the official cash rate to be cut.

The kiwi dollar recently traded at 82.92 US cents from 82.49 cents immediately before the monetary policy statement was released. The trade-weighted index rose to 74.03 from 73.68.

Wheeler kept the official cash rate unchanged at 2.5 percent, as expected. He called the strong kiwi dollar a “significant headwind” for the economy and said he would like to see it lower “if we could achieve it without threatening the inflation outlook and financial stability.”

While intervention was an options “we have yet to find a situation that meets all of our traffic lights”, he said. He trimmed his forecast for 90-day bank bills to 2.7 percent in the fourth quarter of 2013 from the 2.8 percent rate in the September MPS.

“The market was looking for something more dovish and maybe a greater opening for a rate cut,” said Robin Clements, senior economist at UBS New Zealand. “They’ve now concluded that’s not the case,” he said, adding that on first impression the MPS was “reasonably balanced.”

NZ unemployment data overstates labour market woes, RBNZ says

New Zealand’s unemployment rate of 7.3 percent overstates the weakness of the country’s labour market, which has been tapering off through the latter half of this year, the Reserve Bank says.

The bank’s latest forecast is more downbeat about the level of unemployment over the next two years, but isn’t convinced joblessness is at a 13-year high as shown in Statistics New Zealand’s household labour force survey – the official barometer.

The HLFS figures were in contrast to those in the Quarterly Employment Survey, falling numbers of unemployment beneficiaries, rising wage inflation and reports that employers are still finding it hard to attract staff.

“Looking at a broad range of measures, momentum in the labour market has weakened somewhat over the end of 2012,” the bank said in commentary included in today’s three monthly Monetary Policy Statement. “We believe this deterioration is less severe than the HLFS would suggest.”

The central bank expects unemployment of 7.1 percent in the March 2013 year, falling to 5.9 percent in 2014 and 4.9 percent in 2015, according to forecasts in the MPS. That’s more pessimistic than the 6.4 percent, 5.3 percent and 4.9 percent forecasts in September.

(BusinessDesk)

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