JB Hi-Fi shares have soared after returning to trade for the first time since the electronics retailer announced an $870 million takeover of The Good Guys.
The shares rose seven per cent in early trade, after the lifting of a three-day trading halt linked to its announcement on Tuesday of its deal to take control of the whitegoods retail giant.
The shares ended the session at $30.00, a gain of $1.50, or 5.3 per cent.
CMC Markets chief analyst Ric Spooner said profit taking by some investors was preventing JB HiFi shares from hitting last week's all-time high of $31.20.
"Investors have applauded the pricing and strategic possibilities of The Good Guys acquisition," Mr Spooner said.
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But the takeover, which had been anticipated for some time, had been largely been priced in ahead of confirmation of the deal, he said.
The two companies have a combined store count of 295 in Australia and New Zealand, with a 29 per cent share of the home appliances market and 24 per cent of the consumer electronics market.
This is bigger than Harvey Norman's 24 per cent share of home appliances and 15 per cent share of consumer electronics.
Deutsche Bank analysts, who are advising shareholders to hold onto JB Hi-Fi shares, said the acquisition does have benefits for Harvey Norman.
"The industry has now consolidated significantly which should make it less competitive and more rational," they said in a report.
Had The Good Guys chosen to go ahead with plans to float on the share market, it would have likely pursued an aggressive store rollout that could have been damaging to Harvey Norman.
But as part of the JB Hi-Fi group, management plans a steady roll out of four to five new stores a year over the next three years.
Harvey Norman shares have gained about three per cent to $5.20 since JB Hi-Fi announced its takeover of The Good Guys.
The Good Guys will continue to operate as an individual brand with its own chief executive.
JB Hi-Fi's annual report, released on Friday, shows chief executive Richard Murray's total pay package rose to $2.75 million in 2015/16, from $2 million in the previous year.
The company's net profit rose 11.5 per cent in the year to $152 million, as sales increased more than eight per cent.
