Forsyth Barr broker Suzanne Kinnaird said the commission would not make a decision on Z's takeover of the Chevron assets (Caltex) until April 29 next year.
‘‘The delay has little effect on our views albeit there are extra costs to build into the transaction. In the meantime, Z continues to benefit from firming importer margins which have increased between 2.3c per litre and 4cpl in the third quarter.''
The commission needing more time was not particularly surprising given the public and political interest in the deal and the complexity of the deal in terms of the number of markets in which Z operated, she said.
The delay was disappointing as it meant the uncertainty dragged on and the transaction costs for Z continued to tick up at $2 million a month.
The delay added about $10 million of cost to the deal.
Forsyth Barr continued to expect the commission to clear the deal.
‘‘The question is how much value does Z have to give up in order to secure clearance? In our view, the current share price would reflect a commission decision carving out a material portion of Chevron. We believe the down side risk once the final decision is made is low and the upside opportunity is strong.''
Forsyth Barr had an outperform rating on Z.
The earnings forecast had been increased by $12 million to $300 million and the target share price had been lifted by 15c per share to $7.65.
The Commerce Commission issued a statement but a spokesman said there would be no further comment on the application.
In a separate announcement, Z announced it had completed installing a biodiesel distillation column at New Zealand's first commercial scale biodiesel plant in Wiri, Auckland.
The plant, which would move into the testing phase early next year, would turn inedible tallow, a by-product of the New Zealand meat industry, into 20 million litres of biodiesel a year.
There was potential to scale production up to 40 million litres a year.
Z supply and distribution general manager David Binnie said Z invested in the plant, in the absence of a government incentive, because it was important for the company to do the ‘‘right thing''.
‘‘Fuel burned for transportation makes up about 17% of New Zealand's greenhouse emissions. This means Z is currently part of the climate change problem and we're not comfortable with that. We want to instead be at the heart of the solution.''
It would take time but the $26illion investment was a step towards reducing New Zealand's reliance on fossil fuels, he said.
Z shares last traded at $6.48, down 22c
