AGL Energy (AGL):
Prime Minister Malcolm Turnbull escaped from his summit with Andy Vesey with a face-saving promise from the AGL Energy boss to put Turnbull’s Liddell coal plant extension to his board and report back in 90 days, but not much else.Vesey made it crystal clear in a one page news release issued shortly after their meeting broke up that AGL would probably stick with its plans to replace Liddell with a combination of wind and solar energy, gas peaking plants, batteries and ‘‘demand response’’ of distributed energy resources. Since that meshes fairly precisely with Chief Scientist Alan Finkel’s review of energy, and the Australian Energy Market Operator’s report on despatch able power supply released last week, the upshot was hardly surprising. Still, here are some lessons for politicians tempted to seize the commanding heights of the economy and try to tell private-sector firms what to do with assets they have legally bought, operated and developed strategy for.
AMP Limited (AMP):
Financial services behemoth AMP has its advisers working overtime as the company seeks to bed down the future shape of the business. Street Talk understands AMP’s advisers, UBS and Macquarie Capital, have recently held a fact-finding tour through Asia to test buyer interest for its life insurance operations. This column is not suggesting a sale process is imminent – as ANZ Banking Group and Commonwealth Bank of Australia’s respective processes come to a head – but all options are being considered. An AMP spokesman declined to comment. UBS and Macquarie are conducting an extensive AMP portfolio review, with divestments expected to eventuate as the process comes to a conclusion.
Ardent Leisure (AAD):
Ardent Leisure says Charlie Keegan, head of its USbased Main Event Entertainment business, will step down in November after 11 years in the role. Ardent Leisure says Charlie Keegan, the head of its US-based Main Event Entertainment business, will step down in November after 11 years in the role. Mr Keegan, who started in 2006 with the business that now accounts for more than half of Ardent’s profit, will consult as the business seeks a new chief executive, Ardent said on Tuesday. ‘‘Charlie has been with the Main Event business since 2006,’’ Ardent chief executive Simon Kelly said. ‘‘During that time Charlie transformed Main Event Entertainment from a sixcentre bowling concept in Texas to a leading entertainment company with 38 centres operating across the US. I would like to thank Charlie for his hard work and dedication and I wish him well in his future endeavours.’’
Asia Pacific Data Centre (AJD):
The gulf between disgruntled and satisfied shareholders of Asia Pacific Data Centres is widening as the battle for control of the landlord heats up. The data centre group’s tenant, NextDC, has made a $1.87 per security offer for its landlord, which the APDC board has recommended. NextDC yesterday tightened its control by lifting its interest to 23.8 per cent of the target from 21.8 per cent previously. The increase in its stake suggests shareholders are selling into its offer, with shares in APDC closing at $1.88 yesterday and trading around $1.87 to $1.88 for much of the past few days.
Charter Hall Group (CHC):
Charter Hall has acquired a Bunnings Warehouse at Burnie in Tasmania for $21 million that will become one of the seed assets in a new unlisted fund. The retail property was bought on a 6.1 per cent yield from a syndicate of private investors. Led by David Harrison, Charter Hall will hold the property on its balance sheet until it launches its next fund, the Charter Hall Direct Diversified Consumer Staples Fund, or DCSF. That could be as early as next month. ‘‘The Burnie property is strategically located in a land-constrained, core location with no direct competition providing an ideal long-term facility for Bunnings,’’ chief investment officer Sean McMahon said.
Commonwealth Bank of Australia (CBA):
Commonwealth Bank of Australia, the nation’s largest mortgage lender, is cutting rates on interest-only investment loans and offering refinancing rebates in a bid to build market share during the peak spring property market. The bank is targeting fixed-rate investor loans, a market segment that remains robust despite regulatory attempts to cool it down, and luring borrowers from other lenders with $1250 rebates for investment and owner-occupier principal-and-interest home loans. CBA is cutting owner-occupier principal-and-interest four- and fiveyear fixed home loans 20 basis points to 4.19 per cent. Investment interest-only fouryear fixed-rate home loans will decrease 10 basis points to 4.99 per cent.
CropLogic Limited (CLI):
Agricultural technology company CropLogic had a difficult start to life as an ASX-listed company on Tuesday, but chief executive Jamie Cairns expects it will be a ‘‘reasonably temporary’’ blip. CropLogic uses a range of ‘‘internet of things’’ devices and equipment embedded in paddocks and fields to help growers of potatoes, corn, wheat, cotton and soybeans improve crop outcomes and more accurately predict returns on investments. It has been busy in the potato industry in the United States in particular and has been working closely with four big multinational firms, McCain, Simplot, PepsiCo and the $6 billion Lamb Weston company, which is listed on the New York Stock Exchange. CropLogic made a subdued debut on the ASX on Tuesday morning, with its opening trades at 16¢, below the issue price in its IPO of 20¢.
Evolution Mining Limited (EVN):
Evolution Mining has recently received a number of offers to acquire its Edna May gold mine. It plans to progress these offers and will update the market if any binding agreement to sell the asset is entered into. The Edna May gold mine achieved an EBITDA margin of 18% in FY17 and produced 70,188 ounces representing approximately 8% of Evolution's total gold production in FY17.
McGrath Limited (MEA):
Stockbroker Wilsons has traded a 14.66 per cent stake in real estate agents McGrath on behalf of former McGrath agents and senior executives, as first reported by Street Talk. The trade was done at 65¢ a share, a discount to the last traded price, with the stock picked up by about 10 institutions. The block was created by former McGrath director of sales Matt Lahood, and former top Sydney agents Ben Collier, Stephen Chen, Shad Hassen and Brad Gillespie lumping their shares together. The group’s shares became available for purchase last Friday when 46.3 percent of the shares on issue in McGrath came out of escrow. Lahood, who left McGrath after 20 years to form rival real estate agents The Agency, told the Financial Review last week that selling the shares as a block could achieve a premium price.
Nufarm Limited (NUF):
Crop protection company Nufarm says it is considering a number of acquisitions in response to speculation it may pounce on assets held by China National Chemical Corporation and possibly US-based crop protection group Albaugh. Nufarm has been examining how it can benefit from a suite of mega-mergers among global agrichemical giants. State-owned ChemChina sealed the nation’s biggest foreign deal earlier this year with its buyout of Synengta for $US43 billion. Other mergers included the $US130 billion union between Dow Chemical and DuPont and Bayer’s $US66 billion play for Monsanto. Speculation has been rife Nufarm will be involved in buying up assets shaken free in the consolidation. But it missed out in the Dow-DuPont tie-up, after US-based FMC stitched up a $1.6 billion asset swap to grab DuPont’s crop protection assets. It was a deal viewed as too large for Nufarm to swallow. Nufarm said it continued ‘‘to consider opportunities which may result from consolidation in the global agrichemical industry’’. It said there was no guarantee any agreement could be reached. Shares gained 9¢ to $9.16.
Qube Holdings (QUB):
ASX-listed Qube Holdings’ motion to strike out residents’ opposition to its 230-hectare Moorebank Intermodal transport hub in Sydney’s west was dismissed by the NSW Land and Environment Court on Tuesday. In 2015, local residents through the Residents Against Intermodal Development Moorebank Incorporated (RAIDM) requested the court reconsider approval of the park after the rediscovery of an endangered yellow-flowering species Hibbertia fumana. It was rediscovered in the Moorebank area two months before the development was approved but not listed by the NSW Scientific Committee until four days after the NSW Planning Assessment Commission approved the project late last year. ‘‘I find that Qube has not established that RAIDM Inc did not have standing to bring the appeal against the determination to grant consent to the intermodal terminal. Qube’s notice of motion should therefore be dismissed with costs,’’ chief judge Brian Preston said on Tuesday.
Slater & Gordon Limited (SGH):
Troubled listed law firm Slater & Gordon plans to sack around 85 of its 1210 Australian staff as part of a cost-cutting plan. This represents about 7 per cent of Slater & Gordon’s local workforce, the company said in a statement to the stock exchange. The move to slash costs follows a $546.8 million loss for full-year 2017 and comes after board approval of a debt-for-equity deal in which a consortium of hedge funds will take control of the law firm. It has also paid $4m to disgruntled shareholders in a legal settlement designed to head off a potential class action.
Tabcorp Holdings Limited (TAH):
Tabcorp chairman Paula Dwyer is confident of completing the company’s takeover of Tatts Group to create an $11 billion gaming giant in November, with the backing of one of the target’s largest shareholders. Ms Dwyer said yesterday, following the release of the scheme booklet on the deal, that the combined group would be well placed to pursue more investment and - innovation across all of its businesses. Tatts chairman Harry Boon said at the weekend the merger made “industrial logic” but also said it would be naive to say that Tatts’ shareholders were as excited today about the share price of Tabcorp as they were last October. “The summary we had (back) then was a resounding positive reaction from all our shareholders and the reaction we are getting now is, ‘we would really like to see the Tabcorp share price move north before we have to vote, so that we can feel better about it’,” he said.
Ten Networking Holdings (TEN):
Ten Network administrators KordaMentha acted unlawfully when deciding to ask creditors in the broadcaster to accept or reject a takeover offer by US media giant CBS, a court has heard. Lawyers for a rival bid from Ten backer Bruce Gordon yesterday argued that KordaMentha was not legally authorised or empowered to express an opinion as to the merits of one deal over another. “The administrators turned the law on its head by choosing the winner and excluding Birketu and Illyria in its report,” Andrew Bell, SC, representing Mr Gordon, told Justice Ashley Black. Birketu and Illyria are the private investment vehicles of Mr Gordon and Lachlan Murdoch, respectively. They tabled a joint bid for Ten, but KordaMentha backed a rival bid from CBS.
TPG Telecom Limited (TPM):
City-centric TPG Telecom is losing market share as the national broadband network rollout accelerates, according to investment bank UBS. The telco may have shed more than 1 per cent of market share in the year to December 2016, thanks to the regional focus of the NBN rollout, UBS analyst Tom Beadle said. Data collated by the competition watchdog suggests TPG, with a metropolitan-skewed subscriber base of 1.9 million fixed-line broadband subscribers, may have lost even more market share in the June half — largely due to higher broadband penetration in regional areas. Consequently, UBS has downgraded the company’s financial 2018 earnings forecast and valuation from $6.00 to $5.75 per share. TPG closed at $5.28.
Westpac Banking Corporation (WBC):
Westpac, the first bank to acknowledge concerns over noncompliant cladding of the sort involved in London’s Grenfell Tower fire, is auditing all new and current building projects across Australia it is funding to ensure they meet building codes. The move is the first recognition of financiers’ concerns of the risks of combustible cladding on buildings, such as those involved in the London tragedy and Melbourne’s 2014 Lacrosse tower fire. While concerns about combustible cladding centre on residential buildings, audits by authorities across the country have revealed panels containing flammable materials, possibly in breach of the building code and fire safety regulations, on public buildings including Melbourne’s AAMI Park stadium and the New Royal Adelaide Hospital.
Woolworths Limited (WOW):
Woolworths has established pick-up points for online grocery orders in all 970 Australian supermarkets and is testing one-hour deliveries as part of its defence against Amazon. Australia’s largest supermarket chain believes an increasing number of shoppers will opt to pick up their online grocery orders in store or from drive-through locations rather than wait at home for hours for online orders to be delivered. Over the past month, Woolworths has increased the number of stores offering parcel pick-up, also known as click and collect, from almost 400 to 970, setting aside space for storage and collection and training 4500 staff known as ‘‘personal shoppers’’ to pick and pack orders from store shelves. The pick-up program is one of several established under WooliesX, a new division created by Woolworths chief executive Brad Banducci to bring together customer loyalty and digital operations across the group to accelerate online growth, reduce supply chain costs and prepare for the arrival of Amazon by leveraging the retailer’s bricks-and-mortar and digital assets.
(Source: AIMS)
Prime Minister Malcolm Turnbull escaped from his summit with Andy Vesey with a face-saving promise from the AGL Energy boss to put Turnbull’s Liddell coal plant extension to his board and report back in 90 days, but not much else.Vesey made it crystal clear in a one page news release issued shortly after their meeting broke up that AGL would probably stick with its plans to replace Liddell with a combination of wind and solar energy, gas peaking plants, batteries and ‘‘demand response’’ of distributed energy resources. Since that meshes fairly precisely with Chief Scientist Alan Finkel’s review of energy, and the Australian Energy Market Operator’s report on despatch able power supply released last week, the upshot was hardly surprising. Still, here are some lessons for politicians tempted to seize the commanding heights of the economy and try to tell private-sector firms what to do with assets they have legally bought, operated and developed strategy for.
AMP Limited (AMP):
Financial services behemoth AMP has its advisers working overtime as the company seeks to bed down the future shape of the business. Street Talk understands AMP’s advisers, UBS and Macquarie Capital, have recently held a fact-finding tour through Asia to test buyer interest for its life insurance operations. This column is not suggesting a sale process is imminent – as ANZ Banking Group and Commonwealth Bank of Australia’s respective processes come to a head – but all options are being considered. An AMP spokesman declined to comment. UBS and Macquarie are conducting an extensive AMP portfolio review, with divestments expected to eventuate as the process comes to a conclusion.
Ardent Leisure (AAD):
Ardent Leisure says Charlie Keegan, head of its USbased Main Event Entertainment business, will step down in November after 11 years in the role. Ardent Leisure says Charlie Keegan, the head of its US-based Main Event Entertainment business, will step down in November after 11 years in the role. Mr Keegan, who started in 2006 with the business that now accounts for more than half of Ardent’s profit, will consult as the business seeks a new chief executive, Ardent said on Tuesday. ‘‘Charlie has been with the Main Event business since 2006,’’ Ardent chief executive Simon Kelly said. ‘‘During that time Charlie transformed Main Event Entertainment from a sixcentre bowling concept in Texas to a leading entertainment company with 38 centres operating across the US. I would like to thank Charlie for his hard work and dedication and I wish him well in his future endeavours.’’
Asia Pacific Data Centre (AJD):
The gulf between disgruntled and satisfied shareholders of Asia Pacific Data Centres is widening as the battle for control of the landlord heats up. The data centre group’s tenant, NextDC, has made a $1.87 per security offer for its landlord, which the APDC board has recommended. NextDC yesterday tightened its control by lifting its interest to 23.8 per cent of the target from 21.8 per cent previously. The increase in its stake suggests shareholders are selling into its offer, with shares in APDC closing at $1.88 yesterday and trading around $1.87 to $1.88 for much of the past few days.
Charter Hall Group (CHC):
Charter Hall has acquired a Bunnings Warehouse at Burnie in Tasmania for $21 million that will become one of the seed assets in a new unlisted fund. The retail property was bought on a 6.1 per cent yield from a syndicate of private investors. Led by David Harrison, Charter Hall will hold the property on its balance sheet until it launches its next fund, the Charter Hall Direct Diversified Consumer Staples Fund, or DCSF. That could be as early as next month. ‘‘The Burnie property is strategically located in a land-constrained, core location with no direct competition providing an ideal long-term facility for Bunnings,’’ chief investment officer Sean McMahon said.
Commonwealth Bank of Australia (CBA):
Commonwealth Bank of Australia, the nation’s largest mortgage lender, is cutting rates on interest-only investment loans and offering refinancing rebates in a bid to build market share during the peak spring property market. The bank is targeting fixed-rate investor loans, a market segment that remains robust despite regulatory attempts to cool it down, and luring borrowers from other lenders with $1250 rebates for investment and owner-occupier principal-and-interest home loans. CBA is cutting owner-occupier principal-and-interest four- and fiveyear fixed home loans 20 basis points to 4.19 per cent. Investment interest-only fouryear fixed-rate home loans will decrease 10 basis points to 4.99 per cent.
CropLogic Limited (CLI):
Agricultural technology company CropLogic had a difficult start to life as an ASX-listed company on Tuesday, but chief executive Jamie Cairns expects it will be a ‘‘reasonably temporary’’ blip. CropLogic uses a range of ‘‘internet of things’’ devices and equipment embedded in paddocks and fields to help growers of potatoes, corn, wheat, cotton and soybeans improve crop outcomes and more accurately predict returns on investments. It has been busy in the potato industry in the United States in particular and has been working closely with four big multinational firms, McCain, Simplot, PepsiCo and the $6 billion Lamb Weston company, which is listed on the New York Stock Exchange. CropLogic made a subdued debut on the ASX on Tuesday morning, with its opening trades at 16¢, below the issue price in its IPO of 20¢.
Evolution Mining Limited (EVN):
Evolution Mining has recently received a number of offers to acquire its Edna May gold mine. It plans to progress these offers and will update the market if any binding agreement to sell the asset is entered into. The Edna May gold mine achieved an EBITDA margin of 18% in FY17 and produced 70,188 ounces representing approximately 8% of Evolution's total gold production in FY17.
McGrath Limited (MEA):
Stockbroker Wilsons has traded a 14.66 per cent stake in real estate agents McGrath on behalf of former McGrath agents and senior executives, as first reported by Street Talk. The trade was done at 65¢ a share, a discount to the last traded price, with the stock picked up by about 10 institutions. The block was created by former McGrath director of sales Matt Lahood, and former top Sydney agents Ben Collier, Stephen Chen, Shad Hassen and Brad Gillespie lumping their shares together. The group’s shares became available for purchase last Friday when 46.3 percent of the shares on issue in McGrath came out of escrow. Lahood, who left McGrath after 20 years to form rival real estate agents The Agency, told the Financial Review last week that selling the shares as a block could achieve a premium price.
Nufarm Limited (NUF):
Crop protection company Nufarm says it is considering a number of acquisitions in response to speculation it may pounce on assets held by China National Chemical Corporation and possibly US-based crop protection group Albaugh. Nufarm has been examining how it can benefit from a suite of mega-mergers among global agrichemical giants. State-owned ChemChina sealed the nation’s biggest foreign deal earlier this year with its buyout of Synengta for $US43 billion. Other mergers included the $US130 billion union between Dow Chemical and DuPont and Bayer’s $US66 billion play for Monsanto. Speculation has been rife Nufarm will be involved in buying up assets shaken free in the consolidation. But it missed out in the Dow-DuPont tie-up, after US-based FMC stitched up a $1.6 billion asset swap to grab DuPont’s crop protection assets. It was a deal viewed as too large for Nufarm to swallow. Nufarm said it continued ‘‘to consider opportunities which may result from consolidation in the global agrichemical industry’’. It said there was no guarantee any agreement could be reached. Shares gained 9¢ to $9.16.
Qube Holdings (QUB):
ASX-listed Qube Holdings’ motion to strike out residents’ opposition to its 230-hectare Moorebank Intermodal transport hub in Sydney’s west was dismissed by the NSW Land and Environment Court on Tuesday. In 2015, local residents through the Residents Against Intermodal Development Moorebank Incorporated (RAIDM) requested the court reconsider approval of the park after the rediscovery of an endangered yellow-flowering species Hibbertia fumana. It was rediscovered in the Moorebank area two months before the development was approved but not listed by the NSW Scientific Committee until four days after the NSW Planning Assessment Commission approved the project late last year. ‘‘I find that Qube has not established that RAIDM Inc did not have standing to bring the appeal against the determination to grant consent to the intermodal terminal. Qube’s notice of motion should therefore be dismissed with costs,’’ chief judge Brian Preston said on Tuesday.
Slater & Gordon Limited (SGH):
Troubled listed law firm Slater & Gordon plans to sack around 85 of its 1210 Australian staff as part of a cost-cutting plan. This represents about 7 per cent of Slater & Gordon’s local workforce, the company said in a statement to the stock exchange. The move to slash costs follows a $546.8 million loss for full-year 2017 and comes after board approval of a debt-for-equity deal in which a consortium of hedge funds will take control of the law firm. It has also paid $4m to disgruntled shareholders in a legal settlement designed to head off a potential class action.
Tabcorp Holdings Limited (TAH):
Tabcorp chairman Paula Dwyer is confident of completing the company’s takeover of Tatts Group to create an $11 billion gaming giant in November, with the backing of one of the target’s largest shareholders. Ms Dwyer said yesterday, following the release of the scheme booklet on the deal, that the combined group would be well placed to pursue more investment and - innovation across all of its businesses. Tatts chairman Harry Boon said at the weekend the merger made “industrial logic” but also said it would be naive to say that Tatts’ shareholders were as excited today about the share price of Tabcorp as they were last October. “The summary we had (back) then was a resounding positive reaction from all our shareholders and the reaction we are getting now is, ‘we would really like to see the Tabcorp share price move north before we have to vote, so that we can feel better about it’,” he said.
Ten Networking Holdings (TEN):
Ten Network administrators KordaMentha acted unlawfully when deciding to ask creditors in the broadcaster to accept or reject a takeover offer by US media giant CBS, a court has heard. Lawyers for a rival bid from Ten backer Bruce Gordon yesterday argued that KordaMentha was not legally authorised or empowered to express an opinion as to the merits of one deal over another. “The administrators turned the law on its head by choosing the winner and excluding Birketu and Illyria in its report,” Andrew Bell, SC, representing Mr Gordon, told Justice Ashley Black. Birketu and Illyria are the private investment vehicles of Mr Gordon and Lachlan Murdoch, respectively. They tabled a joint bid for Ten, but KordaMentha backed a rival bid from CBS.
TPG Telecom Limited (TPM):
City-centric TPG Telecom is losing market share as the national broadband network rollout accelerates, according to investment bank UBS. The telco may have shed more than 1 per cent of market share in the year to December 2016, thanks to the regional focus of the NBN rollout, UBS analyst Tom Beadle said. Data collated by the competition watchdog suggests TPG, with a metropolitan-skewed subscriber base of 1.9 million fixed-line broadband subscribers, may have lost even more market share in the June half — largely due to higher broadband penetration in regional areas. Consequently, UBS has downgraded the company’s financial 2018 earnings forecast and valuation from $6.00 to $5.75 per share. TPG closed at $5.28.
Westpac Banking Corporation (WBC):
Westpac, the first bank to acknowledge concerns over noncompliant cladding of the sort involved in London’s Grenfell Tower fire, is auditing all new and current building projects across Australia it is funding to ensure they meet building codes. The move is the first recognition of financiers’ concerns of the risks of combustible cladding on buildings, such as those involved in the London tragedy and Melbourne’s 2014 Lacrosse tower fire. While concerns about combustible cladding centre on residential buildings, audits by authorities across the country have revealed panels containing flammable materials, possibly in breach of the building code and fire safety regulations, on public buildings including Melbourne’s AAMI Park stadium and the New Royal Adelaide Hospital.
Woolworths Limited (WOW):
Woolworths has established pick-up points for online grocery orders in all 970 Australian supermarkets and is testing one-hour deliveries as part of its defence against Amazon. Australia’s largest supermarket chain believes an increasing number of shoppers will opt to pick up their online grocery orders in store or from drive-through locations rather than wait at home for hours for online orders to be delivered. Over the past month, Woolworths has increased the number of stores offering parcel pick-up, also known as click and collect, from almost 400 to 970, setting aside space for storage and collection and training 4500 staff known as ‘‘personal shoppers’’ to pick and pack orders from store shelves. The pick-up program is one of several established under WooliesX, a new division created by Woolworths chief executive Brad Banducci to bring together customer loyalty and digital operations across the group to accelerate online growth, reduce supply chain costs and prepare for the arrival of Amazon by leveraging the retailer’s bricks-and-mortar and digital assets.
(Source: AIMS)
Latest comments