Insurance Australia Group (IAG):
Beanbags? Tick. Ping pong table? There it is in the corner. A well-stocked beer fridge and cables hanging from an exposed ceiling? Present and accounted for. All the accoutrements we have come to expect from hip co-working spaces can be found in insurance giant IAG’s much anticipated and soon-to-belaunched ‘‘insurtech’’ lab in Sydney. Over the past few years, some of Australia’s largest financial institutions have set up funds devoted to investing in fintech start-ups or opened hubs, to varying degrees of success. National Australia Bank’s NAB Labs opened in 2015, the same year as the institution backed Stone & Chalk, which is the largest fintech hub in Australia. Westpac launched its own tech focused investment fund Reinventures, while AMP recently shuttered its own venture capital unit. You could be excused for thinking that the insurer’s Firemark Labs is just the latest corporate behemoth jumping on the technology start-up bandwagon. But for IAG chief executive Peter Harmer, the first hub to sit inside a traditional insurance company means a lot more.
BHP Billiton Limited (BHP):
BHP Billiton says the hedge fund Elliott Associates’ plan to collapse the duallisted company structure would cost $US1.3 billion ($1.7 billion) to execute before wasting billions of franking credits by distributing them to people who cannot use them. In a detailed presentation into why BHP has rejected the changes proposed by Elliott, chief executive Andrew Mackenzie said Australian and South African shareholders had the most to lose. The petroleum division, which Elliott has urged be hived off into a New York-listed company, was a crucial part of the diversification that made the company strong, he added. ‘‘The diversity of our portfolio is one of our strengths. It makes us unusual but unusually advantaged,’’ he said as he warned investors against creating a ‘‘balkanised BHP’’. Elliott has refused to clarify how its position in the London listing is held, and BHP chief financial officer Peter Beaven said he had been unable to confirm Elliott’s place on the share register. BHP has not previously published the cost of collapsing its dual-listed structure, and the estimated $US1.3 billion price tag would be comprised of stamp duty, capital gains and other taxes in multiple jurisdictions including Australia.
Spotless Group Holdings Ltd (SPO) & Downer EDI Limited (DOW):
Spotless said it was in talks about ‘‘a potential superior proposal’’ to Downer EDI’s $1.2 billion takeover bid as the contractor’s offer formally opened to shareholders. The services group said it planned to release a Target’s Statement by April 27 and told investors to take no action on Downer’s takeover bid of $1.15 per share in cash. ‘‘Spotless is advancing discussions in respect of a potential superior proposal,’’ the company said, adding that the willingness of third parties to progress the talks depended on ‘‘confidentiality being maintained’’. Spotless said there was no certainty that an alternative proposal would proceed. Spotless shares closed down 1¢ on Wednesday at $1.08. Downer has an advantage over any potential counter-bidders because it has already secured 19.9 per cent of Spotless. New York-headquartered hedge fund Coltrane Asset Management is the services group’s secondbiggest shareholder with a stake of 10.37 per cent. The Australian Securities and Investments Commission gave Downer the go-ahead to dispatch its offer to Spotless shareholders on Wednesday. The takeover offer will remain open until May 15 unless extended.
Tabcorp Holdings Limited (TAH):
Australia’s wagering landscape could pivot “materially” in Tabcorp’s favour over the next two years but the extent of the gains it enjoys will depend on it stopping CrownBet’s retail ambitions. CLSA’s Sacha Krien, in an extensive report on Australia’s wagering sector, said a national point of consumption tax, advertising restrictions and credit card bans could all tip the competitive balance Tabcorp’s way, with corporate bookmakers to be significantly hit.The list of regulatory reforms expected to be introduced by the Turnbull government would be backed by Tabcorp given the level of competition it has faced from corporate bookmakers.
Woolworths Limited (WOW):
Brokerage UBS has flagged labour costs as a key area where Woolworths can gain ground on Coles in the profitability stakes, noting a $340 million opportunity for the retailer. In a note to investors, UBS extended on its recent research into understanding why Coles’s profitability metrics were ahead of its bigger rival. Given Woolworths’ size and scale benefits, analysts headed by Ben Gilbert contend there is no structural reason why Coles should outperform, with Woolworths in the box seat to deliver the better metrics.
TPG Telecom Ltd (TPG):
David Teoh’s daring shake-up of $8b smartphone market Reclusive billionaire David Teoh prefers a low profile, but on Wednesday he put $136 million of his own fortune on the table in a very public splurge intended to shake up Australia’s $8 billion mobile phone market. Teoh’s investors were given only four hours to digest the TPG Telecom executive chairman’s decision before backing an equity raising to help pay $1.26 billion for an 11-year licence to use 2x10 megahertz of 700 MHz mobile spectrum – an Australian and quite possibly global record price that has industry rivals amazed at how much the company has forked out. There is no guarantee of success, but taking the spectrum is a part of the puzzle, Teoh needs to take on established players Telstra, Optus and Vodafone Hutchison Australia and bring in new growth at a time when TPG’s internet business is under intense pressure from the National Broadband Network. A price war is all but assured and Teoh’s rivals will be well aware of his past success at disrupting the telecommunications market.
(Source: AIMS)
Beanbags? Tick. Ping pong table? There it is in the corner. A well-stocked beer fridge and cables hanging from an exposed ceiling? Present and accounted for. All the accoutrements we have come to expect from hip co-working spaces can be found in insurance giant IAG’s much anticipated and soon-to-belaunched ‘‘insurtech’’ lab in Sydney. Over the past few years, some of Australia’s largest financial institutions have set up funds devoted to investing in fintech start-ups or opened hubs, to varying degrees of success. National Australia Bank’s NAB Labs opened in 2015, the same year as the institution backed Stone & Chalk, which is the largest fintech hub in Australia. Westpac launched its own tech focused investment fund Reinventures, while AMP recently shuttered its own venture capital unit. You could be excused for thinking that the insurer’s Firemark Labs is just the latest corporate behemoth jumping on the technology start-up bandwagon. But for IAG chief executive Peter Harmer, the first hub to sit inside a traditional insurance company means a lot more.
BHP Billiton Limited (BHP):
BHP Billiton says the hedge fund Elliott Associates’ plan to collapse the duallisted company structure would cost $US1.3 billion ($1.7 billion) to execute before wasting billions of franking credits by distributing them to people who cannot use them. In a detailed presentation into why BHP has rejected the changes proposed by Elliott, chief executive Andrew Mackenzie said Australian and South African shareholders had the most to lose. The petroleum division, which Elliott has urged be hived off into a New York-listed company, was a crucial part of the diversification that made the company strong, he added. ‘‘The diversity of our portfolio is one of our strengths. It makes us unusual but unusually advantaged,’’ he said as he warned investors against creating a ‘‘balkanised BHP’’. Elliott has refused to clarify how its position in the London listing is held, and BHP chief financial officer Peter Beaven said he had been unable to confirm Elliott’s place on the share register. BHP has not previously published the cost of collapsing its dual-listed structure, and the estimated $US1.3 billion price tag would be comprised of stamp duty, capital gains and other taxes in multiple jurisdictions including Australia.
Spotless Group Holdings Ltd (SPO) & Downer EDI Limited (DOW):
Spotless said it was in talks about ‘‘a potential superior proposal’’ to Downer EDI’s $1.2 billion takeover bid as the contractor’s offer formally opened to shareholders. The services group said it planned to release a Target’s Statement by April 27 and told investors to take no action on Downer’s takeover bid of $1.15 per share in cash. ‘‘Spotless is advancing discussions in respect of a potential superior proposal,’’ the company said, adding that the willingness of third parties to progress the talks depended on ‘‘confidentiality being maintained’’. Spotless said there was no certainty that an alternative proposal would proceed. Spotless shares closed down 1¢ on Wednesday at $1.08. Downer has an advantage over any potential counter-bidders because it has already secured 19.9 per cent of Spotless. New York-headquartered hedge fund Coltrane Asset Management is the services group’s secondbiggest shareholder with a stake of 10.37 per cent. The Australian Securities and Investments Commission gave Downer the go-ahead to dispatch its offer to Spotless shareholders on Wednesday. The takeover offer will remain open until May 15 unless extended.
Tabcorp Holdings Limited (TAH):
Australia’s wagering landscape could pivot “materially” in Tabcorp’s favour over the next two years but the extent of the gains it enjoys will depend on it stopping CrownBet’s retail ambitions. CLSA’s Sacha Krien, in an extensive report on Australia’s wagering sector, said a national point of consumption tax, advertising restrictions and credit card bans could all tip the competitive balance Tabcorp’s way, with corporate bookmakers to be significantly hit.The list of regulatory reforms expected to be introduced by the Turnbull government would be backed by Tabcorp given the level of competition it has faced from corporate bookmakers.
Woolworths Limited (WOW):
Brokerage UBS has flagged labour costs as a key area where Woolworths can gain ground on Coles in the profitability stakes, noting a $340 million opportunity for the retailer. In a note to investors, UBS extended on its recent research into understanding why Coles’s profitability metrics were ahead of its bigger rival. Given Woolworths’ size and scale benefits, analysts headed by Ben Gilbert contend there is no structural reason why Coles should outperform, with Woolworths in the box seat to deliver the better metrics.
TPG Telecom Ltd (TPG):
David Teoh’s daring shake-up of $8b smartphone market Reclusive billionaire David Teoh prefers a low profile, but on Wednesday he put $136 million of his own fortune on the table in a very public splurge intended to shake up Australia’s $8 billion mobile phone market. Teoh’s investors were given only four hours to digest the TPG Telecom executive chairman’s decision before backing an equity raising to help pay $1.26 billion for an 11-year licence to use 2x10 megahertz of 700 MHz mobile spectrum – an Australian and quite possibly global record price that has industry rivals amazed at how much the company has forked out. There is no guarantee of success, but taking the spectrum is a part of the puzzle, Teoh needs to take on established players Telstra, Optus and Vodafone Hutchison Australia and bring in new growth at a time when TPG’s internet business is under intense pressure from the National Broadband Network. A price war is all but assured and Teoh’s rivals will be well aware of his past success at disrupting the telecommunications market.
(Source: AIMS)
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