BHP Billiton Limited (BHP); BlueScope Steel Limited (TES); Orica Ltd (ORI); OZ Minerals Limited (OZL):
Activist investor Tribeca has named former Amcor boss Ken MacKenzie as the best internal candidate for the chairmanship of BHP Billiton, currently Jac Nasser, but declared it would prefer an external candidate with extensive resources experience.Tribeca’s natural resources portfolio manager Ben Cleary said he was hearing a groundswell of support from BHP shareholders for an external candidate such as departing MMG chief Andrew Michelmore, former BHP chief executive Charles ‘‘Chip’’ Goodyear or BlueScope Steel managing director Paul O’Malley. The two other internal candidates to replace Mr Nasser, Orica chairman Malcolm Broomhead and Westpac chairman Lindsay Maxsted, were on the board when BHP paid $US15 billion for Petrohawk Energy in August 2011.
Commonwealth Bank of Australia (CBA); Australia and New Zealand Banking Group (ANZ); National Australia Bank Ltd. NAB); Westpac Banking Corporation (WBC):
A mortgage ‘‘mystery shopping’’ exercise by Macquarie has found banks are offering first-time home buyers in Sydney substantially lower loan amounts after tightening living expense assumptions and applying more conservative interest rate buffers. Members of analyst Victor German’s team at Macquarie posed as potential bank customers at ANZ, Commonwealth Bank, NAB, Westpac, St George, Bankwest, Bendigo and Adelaide Bank, Bank of Queensland and Suncorp, telling each bank they were a firsthome buyer considering an owneroccupier or investment loan. In interviews with the banks on the phone and in branches, the analysts told the banks they were on a wage of $105,000, had general living expenses of $1200 a month, were spending $1300 a month on rent, and had no dependents and a clear credit history. The exercise did not progress as far as the application stage. The study found the major banks are willing to lend 14 per cent to 19 per cent less to owner-occupiers, and 12 per cent to 26 per cent less to investors, compared to what they offered two years ago (Macquarie has conducted the same mystery shopping exercise for the past three years using the same criteria.
Charter Hall Group (CHC):
Charter Hall Retail REIT has snapped up the Highfields Village shopping centre in Toowoomba, Queensland for $41 million, reflecting a capitalisation rate of 6 per cent. Fund manager of the real estate investment trust Scott Dundas said the purchase was in line with the fund’s strategy to sell smaller shopping centres and buy bigger conveniencebased, supermarket-anchored shopping centres with strong demographic profiles. ‘‘Highfields Village is an asset that enjoys exposure to a growing population base with strong trading fundamentals and further capacity to grow income,’’ Mr Dundas said.
Fortescue Metals Group Limited (FMG); Rio Tinto Limited (RIO):
The slump in the iron ore price might have some investors with their fingers on the panicked sell button, but Deutsche Bank is saying this drop is no doomsday scenario. The bulk commodity’s spot price hit a 12-month low on Wednesday and futures also fell amid growing concern a slowing Chinese property market may dent steel demand. Spot iron ore with 62 per cent content delivered in Qingdao was down 2.75 per cent at $US53.36 a tonne. Australia’s largest export has dropped 40 per cent from its peak in February. Another consideration playing on the minds of investors is China’s decision to shut as much as 150 million tonnes of annual crude steel capacity, much of which was trading illegally and ignored in the official demand count. While that paints a pretty gloomy picture for the iron ore price over the near term, Deutsche points to a solid pipeline of Chinese infrastructure projects to uphold steel demand.
Telstra Corporation Ltd (TLS):
Telstra chief executive Andy Penn has blamed an urgent need to transform in the face of digital disruption and transition to a post-NBN world for a decision to slash up to 1400 jobs, in a move union bosses described as an ‘‘ambush’’. The nation’s largest telecommunications company informed staff on Wednesday morning that it was restructuring some of its divisions and would lay off workers from across the organisation during the next six months. In a note to employees, Mr Penn said the company was pursuing proposed restructures in its operations, retail, Global Enterprise and Services and media and marketing divisions, which would allow it to deliver simpler endto-end services, reduce its overall operating costs and enable it to compete more effectively.
Wesfarmers Ltd (WES); Wooloworths Ltd (WOW):
Two years after Wesfarmers chief executive Richard Goyder questioned whether Aldi Australia was paying its fair share of tax, the supermarket chain has bowed to pressure and agreed to sign up to the government’s voluntary tax transparency code. Under the move, Aldi Australia will publish an annual report on its website, starting in September, revealing its actual rate of tax, its tax strategies and transactions between the company and its German parent, Aldi Sud. However, Aldi rivals hoping to pressure the secretive retailer into revealing more details about its financial affairs will be disappointed. Aldi Australia chief executive Tom Daunt told The Australian Financial Review the group had no plans to change its limited partnership structure, under which it was not required to disclose detailed accounts to the Australian Securities and Investments Commission.
Vocus Group Ltd (VOC):
Vocus Group CEO Geoff Horth has apologised to shareholders in the embattled telecoms group for a string of missteps, and signalled a $3.3 billion bid from Kohlberg Kravis Roberts & Co described by shareholders as ‘‘opportunistic’’ will be rejected. ‘‘We have not executed, we have to acknowledge that,’’ Mr Horth told The Australian Financial Review on the sidelines of a company strategy day. ‘‘The business has gone through a significant period of change. We had a very complex integration and transformation program afoot and we didn’t have the right people in roles. Like all shareholders we are very disappointed with the performance of the business over the last 12 months, and we are very committed to setting it right.’’ Storied leveraged buyout firm KKR last week swooped with a bid for the firm worth $3.50 a share. That values Vocus’ equity at $2.2 billion, and the entire company at $3.3 billion, including debt.
(Source: AIMS)
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