Australia and New Zealand Banking Group Limited (ANZ) & Commonwealth Bank of Australia (CBA) & National Australia Bank Limited (NAB) & Westpac Banking Corporation (WBC):
The major banks have taken the extraordinary step of pitching the Turnbull government to set up a formal inquiry into the banking system. In a letter signed by the four major bank chief executives and chairs, a formal inquiry is now said to be in the national interest. The CEOs of the Commonwealth, Westpac, National Australia and ANZ banks made the request in an email sent on Thursday to Treasurer Scott Morrison. They have called on the federal government to set up a “properly constituted inquiry” into the financial services sector. It comes amid mounting pressure on the coalition government from Labour and some Nationals MPs for the establishment of a royal commission into the nation’s banks. Now, the bank chiefs say an inquiry is needed to restore public trust and confidence.
Australia and New Zealand Banking Group Limited (ANZ) & Commonwealth Bank of Australia (CBA) & National Australia Bank Limited (NAB) & Westpac Banking Corporation (WBC):
Banks and financial institutions have fallen sharply at the open on Thursday following the Prime Minister's announcement of a Royal Commission into the banking, superannuation and financial services industry. The terms of reference is wider than anticipated with the entire financial services to be included in the inquiry but also narrower with the Prime Minister announcing the inquiry would only go for 12 months with a final report due in February 2019. At 8.30am, before the announcement of a Royal Commission was made by the government, the big four banks released a letter written to the Treasurer calling for inquiry. Each of the banks released copies of the letter to the press and published them on the ASX before the market open setting the scene for a wild day on the bourse. The big four banks stepped lower at by 11.30am ANZ was down 1.3 per cent, Commonwealth Bank down 2.5 per cent, NAB down 1.2 per cent and Westpac down 1.8 per cent.
AWE Limited (AWE):
Oil and gas company AWE has received a $430 million indicative and conditional takeover offer from state-owned China Energy Reserve and Chemical Group. The offer price of 71 cents per share is pitched at a 30 per cent premium to AWE’s last-traded share price of 54.5c. Sydney-based AWE, whose undeveloped projects include the Waitsia gas field in Western Australia and the Santos-run Ande Ande Lumut oilfield in Indonesia, announced the bid to the stock exchange this morning. The company has producing interests in the BassGas and Casino gas project off Victoria. AWE has appointed UBS as its financial adviser on the bid, which is conditional on a recommendation from the AWE board, which could include being done through a scheme of arrangement. An offer would also be conditional on due diligence and Foreign Investment Review Board approval.
Aristocrat Leisure Limited (ALL):
Aristocrat confirming it will pay Big Fish's parent company Churchill Downs $US990 million ($1.3 billion) for the company. Big Fish makes the popular Big Fish Casino game, as well as social gaming titles like Gummy Drop! and Fairway Solitaire. The deal will double Aristocrat's digital revenues to about $651 million annually. It is the second big purchase under new chief executive Trevor Croker, who paid $US500 million ($677 million) for Israeli social gaming company Plarium in August. Plarium makes digital strategy games such as the popular Vikings: War of Clans, which Mr Croker said would complement the poker machine manufacturing and online gaming giant's existing businesses. Mr Croker said the "strategic and financial benefits from the acquisition are highly compelling" and that Big Fish's "strength in casual and card games is highly complimentary to Plarium's strategy games portfolio." Aristocrat also announced record net profit after tax of $495 million from revenue of about $2.4 billion for its 2017 financial year, up 41 per cent and 15 per cent respectively. The company will pay a 20¢ per share dividend.
Avjennings Limited (AVJ):
Listed residential developer -AVJennings is looking to develop high-quality residential build-to-rent projects aimed at longterm investors. Also known as multi-family, build to rent or institutionally owned residential products form a well-established sector in the US that has recently started to draw interest in Australia. Mirvac is looking for institutional investors for its build-to-rent project, while US retail group Greystar and Macquarie are working on plans and private -developer Salta has -announced a move into the sector. AVJennings chief executive Peter Summers said the group — which has a focus on house and land packages and low-rise apartments — would consider a move into build to rent, most likely in a partnership rather than alone. The demand drivers for institutional rental stock were clear, even as traditional detached houses remained the core of the housing market, Mr Summers told The Australian. “There are more people renting,” he said. “In the younger generation, their lives changed a bit and we need to be reacting to that.” Many developers had been required in the past to make a commitment to social housing or inclusionary housing in projects but some of these had been low quality, he said.
Cromwell Property Group (CMW):
The listed Cromwell Property Group has copped a strike against its remuneration report at its annual meeting as it flagged it will float its $2 billion-plus -European property trust in Singapore today. The group faced a 30.98 per cent protest vote at yesterday’s meeting after institutions followed the recommendations of proxy advisers critical of its salary practices. Mr Levy noted that Cromwell had sold its stake in the Investa Office Fund last month — after its takeover approaches were -rebuffed — at a “healthy profit”. Cromwell is yet to update its guidance for either its exit from IOF or its coming float, but Mr Weightman said local property is running hot and the group is -focused on pouring capital into its existing holdings. He flagged reinvestment -opportunities in portfolio assets in Chatswood in Sydney, and Centenary House, TGA and Campbell Park in the ACT. Cromwell recut the terms of its planned Singaporean float mid-month, with the vehicle trimmed back to about €1.35bn ($2.1bn) of assets in advanced economies across Europe.
Crown Resorts Limited (CWN) & Tabcorp Holdings Limited (TAH) & TATTS Group Limited (TTS):
The James Packer-backed CrownBet has confirmed it will not appeal the regulatory approval of the Tabcorp and Tatts merger, after securing a racing vision deal with Tabcorp. The racing vision deal clears one of the final hurdles for Tabcorp to complete the Tatts deal by the end of the year, with it now just waiting on confirmation from the competition regulator that it also won’t appeal approval. Tabcorp said the vision supply agreement would see Tabcorp supply a digital stream of Sky 1 and Sky 2 to CrownBet for use by its wagering customers on their mobile and PC devices. CrownBet will make payments to Tabcorp, subject to an annual minimum amount. CrownBet said today that it would not apply for judicial review of the Australian Competition Tribunal’s approval of the tie-up between Tabcorp and Tatts to create an $11 billion gaming giant. “CrownBet’s competition concerns have been sufficiently addressed by an arrangement between CrownBet, Tabcorp and Sky in relation to the streaming of racing vision to CrownBet customers,” CrownBet said in a statement. “CrownBet no longer opposes the merger of Tabcorp and Tatts and will not to interfere in any way with the implementation of the merger.” Tabcorp is desperate to finalise the deal before the end of the year following a series of delays because of appeals to the original regulatory approval.
Fortescue Metals Group Ltd FMG) & Atlas Iron Limited (AGO):
Iron ore exports from Fortescue Metals Group and Atlas Iron have suffered a distinct drop this month, in a sign that the wide price discount on low-grade iron ore has taken a toll on the duo. An analysis of Pilbara port data by Deutsche Bank analyst Paul Young noted that Fortescue and Atlas have been operating at more than 20 per cent below their October export levels during November. The two miners have been among the hardest hit by a widening in the gap between higher and lower-grade iron ore following policy intervention by the Chinese government. The lower-grade material, which represents a greater proportion of the output from Fortescue and Atlas compared to BHP and Rio Tinto, has historically sold at a 5 to 10 per cent discount to higher grade ore, but that gap has blown out to more than 30 per cent in recent months after China ordered the closure of a large chunk of its steel mills. The broad discount has eaten into Fortescue’s margins and has unwound much of the gains made through its aggressive cost-cutting and operational overhaul of recent years.
Fortescue Metals Group Ltd (FMG):
Fortescue today announced that Ms Gaines would take over from the outgoing Nev Power, making her the first female CEO of a major Australian mining company. While Ms Gaines, currently FMG’s chief financial officer, was considered a frontrunner for the CEO role, Fortescue also announced the surprise appointment of Julie Shuttleworth, the general manager of Fortescue’s Solomon operations, into the newly-created role of deputy chief executive. Ms Gaines was vying for the position with Fortescue’s director of operations, Greg Lilleyman, who will now move into the newly-created role of chief operating officer. Fortescue chairman Mr Forrest, who owns 33 per cent of the company, said in a statement to the ASX that the new leadership team would differentiate itself from the typical “command and control environment” in the resources sector. Ms Gaines said in a statement that she was both privileged and humbled to be chosen as Fortescue’s third CEO. “Fortescue is a unique company and a feature of our success is the strong relationship between the chairman and CEO,” she said. “I embrace the culture and values that truly set this company apart and I look forward to working with Andrew, the board and the newly appointed leadership team of talented individuals to continue to deliver success and value for our shareholders.”
Kangaroo Island Plantation Timbers Ltd (KPT):
Kangaroo Island Plantation Timbers Ltd is seeking to raise $15 million at a 17 per cent discount to its last close. Broker Petra Capital launched the offer on Thursday morning, seeking to sell 7.5 million new shares at $2 each. The offer was at a 17 per cent discount to the last close and a 13.5 per cent discount to the 30-day volume weighted average price, according to terms sent to potential investors. Funds raised were for working capital, pontoon relocation and repayment of a loan among other uses. Petra Capital was calling for bids by midday on Friday. The company had a $100 million market capitalisation prior to the offer.
Lendlease Group (LLC):
Prices in pockets of Brisbane’s oversupplied apartment market could fall 10-15 per cent over the next two years as the city bears the brunt of what will otherwise be an orderly slowdown across capital city housing markets, -according to Lendlease chief executive Steve McCann. “There are pockets of the market — and suburban locations are hardest hit — where you have developers who have funding challenges,” Mr McCann said of the apartment market. “So developers that can’t achieve significant presales and need high leverage are struggling to bring product to market,” Mr McCann told The Australian. It was difficult to put a number on the extent of delayed apartment projects, Mr McCann said, although Lendlease had estimated six months ago that 100 new eastern seaboard developments would not go ahead. The global development and construction group is settling its last near-400 apartment building in its Brisbane Showgrounds urban redevelopment project in Brisbane’s inner Bowen Hills. “It’s our only Brisbane project … completed just before June and we don’t have any other stock that we will bring to market in the short term in Brisbane,” he said
Orotongroup Limited (ORL):
Upmarket accessories retailer OrotonGroup has collapsed after major shareholders the Lane family and high profile fund manager Will Vicars failed to step in and rescue the business. The OrotonGroup board placed the company into voluntary administration on Thursday after failing to secure several options including a privatisation by the Lane or Vicars families, an offer for the company, a recapitalisation or refinancing following a six-month strategic review. OrotonGroup, which was founded by Boyd Lane 80 years ago, has appointed Deloitte Restructuring Services partners Vaughan Strawbridge and Glen Kanevsky as administrators. About 59 Oroton stores will continue to trade while the administrators explore options for the business, including a sale or recapitalisation. OrotonGroup shares were placed in trading halt on Tuesday, when directors said they were finalising the outcome of the strategic review. Minority shareholders believed the Lane family, which owns 21 per cent, or long-time supporter Caledonia Funds Management chief investment officer Will Vicars, who owns 17 per cent and lent the company $3 million for working capital earlier this year, would take the company private. OrotonGroup had also been approached by prospective buyers including clothing retailer Gazal Corp, which acquired a 7 per cent stake in July, and private equity firm Anchorage Capital Partners.
Rio Tinto Limited (RIO):
One of Rio Tinto’s biggest local investors has delivered a warning on lithium — a sector in which Rio is considering becoming a major player — declaring that while battery demand is expected to soar, new lithium supply will cap prices. The warning from Colonial First State Global Asset Management’s head of global resources, Todd Warren, comes ahead of an investor briefing from Rio chief Jean-Sebastien Jacques and senior executives in Sydney on Monday. More detail on Rio’s plans to invest in new metals to capture disruption-driven demand is expected to be sought from investors at the presentation. Rio is investigating the big Jadar discovery in Serbia, which could become the world’s third-biggest lithium mine, and has established a “Ventures” unit to look at investment in new commodities expected to experience demand growth due to disruptive technologies. Mr Jacques told Japan’s Nikkei newspaper this month that lithium was an example of the type of commodity that the Ventures unit was looking at. Rio is also reportedly weighing up a bid for a 32 per cent stake in Chilean lithium company SQM, valued at $US4.8 billion ($6.3bn).
Seek Limited (SEK):
Seek shares have slumped despite the job ads group upgrading its full-year earnings forecast, with the tipped 13 per cent rise seeming to fall short of expectations. Chief executive Andrew Bassat told the annual general meeting yesterday that pre-tax earnings for the fiscal year were expected to swell by about 13 per cent from last year, up from its previous forecast of 10 per cent growth. Mr Bassat said Seek was primed to take advantage of the “enormous” opportunity of the international market, which helped boost revenue by 48 per cent over the past three years. The company, whose operations span more than a dozen countries, has enjoyed a better-than-expected performance and last year hit $1bn in revenue for the first time in its 20-year history. “This is a big milestone given approximately 60 per cent of our revenue is now from international operations,” chairman Neil Chatfield told shareholders. Mr Bassat said the earnings performance of the Australian and New Zealand operations, Seek Asia and online education services so far this financial year had been encouraging. But he noted the company would have larger-than-expected interest costs related to its Chinese subsidiary, Zhaopin. Seek finished Zhaopin’s privatisation last month, partnering with private equity firms Hillhouse Capital Management and FountainVest Partners.
Transurban Group (TCL):
Transurban Group investors may be well advised to keep some cash on the sidelines this Christmas, with the tollroad company mulling a share issue to help pay for a $5.5 billion expansion project in Melbourne. The project is the West Gate Tunnel which Transurban is seeking to develop in partnership with the Victorian government. The new tunnel received environmental and planning approval this week, which moved it up the chain to the Victorian roads minister for approval, and later cabinet. Transurban has long told investors it is seeking to have the project approved and reach financial close by the end of this year. And it is understood that timetable has not changed. Financial close would trigger a $3.5 billion to $4 billion funding commitment for Transurban, split between debt and equity. While the tollroad company does not have to write a big cheque on day one, it has been working on funding options all year and is expected to move sooner rather than later. So expectations on equities desks are building of a $2 billion-odd equity raising heading into Christmas, provided the company can clear that final government hurdle. House advisers Morgan Stanley and UBS would be expected to handle the deal. Transurban chairman Lindsay Maxsted has not shied away from discussing the potential raising with investors.
(Source: AIMS)
The major banks have taken the extraordinary step of pitching the Turnbull government to set up a formal inquiry into the banking system. In a letter signed by the four major bank chief executives and chairs, a formal inquiry is now said to be in the national interest. The CEOs of the Commonwealth, Westpac, National Australia and ANZ banks made the request in an email sent on Thursday to Treasurer Scott Morrison. They have called on the federal government to set up a “properly constituted inquiry” into the financial services sector. It comes amid mounting pressure on the coalition government from Labour and some Nationals MPs for the establishment of a royal commission into the nation’s banks. Now, the bank chiefs say an inquiry is needed to restore public trust and confidence.
Australia and New Zealand Banking Group Limited (ANZ) & Commonwealth Bank of Australia (CBA) & National Australia Bank Limited (NAB) & Westpac Banking Corporation (WBC):
Banks and financial institutions have fallen sharply at the open on Thursday following the Prime Minister's announcement of a Royal Commission into the banking, superannuation and financial services industry. The terms of reference is wider than anticipated with the entire financial services to be included in the inquiry but also narrower with the Prime Minister announcing the inquiry would only go for 12 months with a final report due in February 2019. At 8.30am, before the announcement of a Royal Commission was made by the government, the big four banks released a letter written to the Treasurer calling for inquiry. Each of the banks released copies of the letter to the press and published them on the ASX before the market open setting the scene for a wild day on the bourse. The big four banks stepped lower at by 11.30am ANZ was down 1.3 per cent, Commonwealth Bank down 2.5 per cent, NAB down 1.2 per cent and Westpac down 1.8 per cent.
AWE Limited (AWE):
Oil and gas company AWE has received a $430 million indicative and conditional takeover offer from state-owned China Energy Reserve and Chemical Group. The offer price of 71 cents per share is pitched at a 30 per cent premium to AWE’s last-traded share price of 54.5c. Sydney-based AWE, whose undeveloped projects include the Waitsia gas field in Western Australia and the Santos-run Ande Ande Lumut oilfield in Indonesia, announced the bid to the stock exchange this morning. The company has producing interests in the BassGas and Casino gas project off Victoria. AWE has appointed UBS as its financial adviser on the bid, which is conditional on a recommendation from the AWE board, which could include being done through a scheme of arrangement. An offer would also be conditional on due diligence and Foreign Investment Review Board approval.
Aristocrat Leisure Limited (ALL):
Aristocrat confirming it will pay Big Fish's parent company Churchill Downs $US990 million ($1.3 billion) for the company. Big Fish makes the popular Big Fish Casino game, as well as social gaming titles like Gummy Drop! and Fairway Solitaire. The deal will double Aristocrat's digital revenues to about $651 million annually. It is the second big purchase under new chief executive Trevor Croker, who paid $US500 million ($677 million) for Israeli social gaming company Plarium in August. Plarium makes digital strategy games such as the popular Vikings: War of Clans, which Mr Croker said would complement the poker machine manufacturing and online gaming giant's existing businesses. Mr Croker said the "strategic and financial benefits from the acquisition are highly compelling" and that Big Fish's "strength in casual and card games is highly complimentary to Plarium's strategy games portfolio." Aristocrat also announced record net profit after tax of $495 million from revenue of about $2.4 billion for its 2017 financial year, up 41 per cent and 15 per cent respectively. The company will pay a 20¢ per share dividend.
Avjennings Limited (AVJ):
Listed residential developer -AVJennings is looking to develop high-quality residential build-to-rent projects aimed at longterm investors. Also known as multi-family, build to rent or institutionally owned residential products form a well-established sector in the US that has recently started to draw interest in Australia. Mirvac is looking for institutional investors for its build-to-rent project, while US retail group Greystar and Macquarie are working on plans and private -developer Salta has -announced a move into the sector. AVJennings chief executive Peter Summers said the group — which has a focus on house and land packages and low-rise apartments — would consider a move into build to rent, most likely in a partnership rather than alone. The demand drivers for institutional rental stock were clear, even as traditional detached houses remained the core of the housing market, Mr Summers told The Australian. “There are more people renting,” he said. “In the younger generation, their lives changed a bit and we need to be reacting to that.” Many developers had been required in the past to make a commitment to social housing or inclusionary housing in projects but some of these had been low quality, he said.
Cromwell Property Group (CMW):
The listed Cromwell Property Group has copped a strike against its remuneration report at its annual meeting as it flagged it will float its $2 billion-plus -European property trust in Singapore today. The group faced a 30.98 per cent protest vote at yesterday’s meeting after institutions followed the recommendations of proxy advisers critical of its salary practices. Mr Levy noted that Cromwell had sold its stake in the Investa Office Fund last month — after its takeover approaches were -rebuffed — at a “healthy profit”. Cromwell is yet to update its guidance for either its exit from IOF or its coming float, but Mr Weightman said local property is running hot and the group is -focused on pouring capital into its existing holdings. He flagged reinvestment -opportunities in portfolio assets in Chatswood in Sydney, and Centenary House, TGA and Campbell Park in the ACT. Cromwell recut the terms of its planned Singaporean float mid-month, with the vehicle trimmed back to about €1.35bn ($2.1bn) of assets in advanced economies across Europe.
Crown Resorts Limited (CWN) & Tabcorp Holdings Limited (TAH) & TATTS Group Limited (TTS):
The James Packer-backed CrownBet has confirmed it will not appeal the regulatory approval of the Tabcorp and Tatts merger, after securing a racing vision deal with Tabcorp. The racing vision deal clears one of the final hurdles for Tabcorp to complete the Tatts deal by the end of the year, with it now just waiting on confirmation from the competition regulator that it also won’t appeal approval. Tabcorp said the vision supply agreement would see Tabcorp supply a digital stream of Sky 1 and Sky 2 to CrownBet for use by its wagering customers on their mobile and PC devices. CrownBet will make payments to Tabcorp, subject to an annual minimum amount. CrownBet said today that it would not apply for judicial review of the Australian Competition Tribunal’s approval of the tie-up between Tabcorp and Tatts to create an $11 billion gaming giant. “CrownBet’s competition concerns have been sufficiently addressed by an arrangement between CrownBet, Tabcorp and Sky in relation to the streaming of racing vision to CrownBet customers,” CrownBet said in a statement. “CrownBet no longer opposes the merger of Tabcorp and Tatts and will not to interfere in any way with the implementation of the merger.” Tabcorp is desperate to finalise the deal before the end of the year following a series of delays because of appeals to the original regulatory approval.
Fortescue Metals Group Ltd FMG) & Atlas Iron Limited (AGO):
Iron ore exports from Fortescue Metals Group and Atlas Iron have suffered a distinct drop this month, in a sign that the wide price discount on low-grade iron ore has taken a toll on the duo. An analysis of Pilbara port data by Deutsche Bank analyst Paul Young noted that Fortescue and Atlas have been operating at more than 20 per cent below their October export levels during November. The two miners have been among the hardest hit by a widening in the gap between higher and lower-grade iron ore following policy intervention by the Chinese government. The lower-grade material, which represents a greater proportion of the output from Fortescue and Atlas compared to BHP and Rio Tinto, has historically sold at a 5 to 10 per cent discount to higher grade ore, but that gap has blown out to more than 30 per cent in recent months after China ordered the closure of a large chunk of its steel mills. The broad discount has eaten into Fortescue’s margins and has unwound much of the gains made through its aggressive cost-cutting and operational overhaul of recent years.
Fortescue Metals Group Ltd (FMG):
Fortescue today announced that Ms Gaines would take over from the outgoing Nev Power, making her the first female CEO of a major Australian mining company. While Ms Gaines, currently FMG’s chief financial officer, was considered a frontrunner for the CEO role, Fortescue also announced the surprise appointment of Julie Shuttleworth, the general manager of Fortescue’s Solomon operations, into the newly-created role of deputy chief executive. Ms Gaines was vying for the position with Fortescue’s director of operations, Greg Lilleyman, who will now move into the newly-created role of chief operating officer. Fortescue chairman Mr Forrest, who owns 33 per cent of the company, said in a statement to the ASX that the new leadership team would differentiate itself from the typical “command and control environment” in the resources sector. Ms Gaines said in a statement that she was both privileged and humbled to be chosen as Fortescue’s third CEO. “Fortescue is a unique company and a feature of our success is the strong relationship between the chairman and CEO,” she said. “I embrace the culture and values that truly set this company apart and I look forward to working with Andrew, the board and the newly appointed leadership team of talented individuals to continue to deliver success and value for our shareholders.”
Kangaroo Island Plantation Timbers Ltd (KPT):
Kangaroo Island Plantation Timbers Ltd is seeking to raise $15 million at a 17 per cent discount to its last close. Broker Petra Capital launched the offer on Thursday morning, seeking to sell 7.5 million new shares at $2 each. The offer was at a 17 per cent discount to the last close and a 13.5 per cent discount to the 30-day volume weighted average price, according to terms sent to potential investors. Funds raised were for working capital, pontoon relocation and repayment of a loan among other uses. Petra Capital was calling for bids by midday on Friday. The company had a $100 million market capitalisation prior to the offer.
Lendlease Group (LLC):
Prices in pockets of Brisbane’s oversupplied apartment market could fall 10-15 per cent over the next two years as the city bears the brunt of what will otherwise be an orderly slowdown across capital city housing markets, -according to Lendlease chief executive Steve McCann. “There are pockets of the market — and suburban locations are hardest hit — where you have developers who have funding challenges,” Mr McCann said of the apartment market. “So developers that can’t achieve significant presales and need high leverage are struggling to bring product to market,” Mr McCann told The Australian. It was difficult to put a number on the extent of delayed apartment projects, Mr McCann said, although Lendlease had estimated six months ago that 100 new eastern seaboard developments would not go ahead. The global development and construction group is settling its last near-400 apartment building in its Brisbane Showgrounds urban redevelopment project in Brisbane’s inner Bowen Hills. “It’s our only Brisbane project … completed just before June and we don’t have any other stock that we will bring to market in the short term in Brisbane,” he said
Orotongroup Limited (ORL):
Upmarket accessories retailer OrotonGroup has collapsed after major shareholders the Lane family and high profile fund manager Will Vicars failed to step in and rescue the business. The OrotonGroup board placed the company into voluntary administration on Thursday after failing to secure several options including a privatisation by the Lane or Vicars families, an offer for the company, a recapitalisation or refinancing following a six-month strategic review. OrotonGroup, which was founded by Boyd Lane 80 years ago, has appointed Deloitte Restructuring Services partners Vaughan Strawbridge and Glen Kanevsky as administrators. About 59 Oroton stores will continue to trade while the administrators explore options for the business, including a sale or recapitalisation. OrotonGroup shares were placed in trading halt on Tuesday, when directors said they were finalising the outcome of the strategic review. Minority shareholders believed the Lane family, which owns 21 per cent, or long-time supporter Caledonia Funds Management chief investment officer Will Vicars, who owns 17 per cent and lent the company $3 million for working capital earlier this year, would take the company private. OrotonGroup had also been approached by prospective buyers including clothing retailer Gazal Corp, which acquired a 7 per cent stake in July, and private equity firm Anchorage Capital Partners.
Rio Tinto Limited (RIO):
One of Rio Tinto’s biggest local investors has delivered a warning on lithium — a sector in which Rio is considering becoming a major player — declaring that while battery demand is expected to soar, new lithium supply will cap prices. The warning from Colonial First State Global Asset Management’s head of global resources, Todd Warren, comes ahead of an investor briefing from Rio chief Jean-Sebastien Jacques and senior executives in Sydney on Monday. More detail on Rio’s plans to invest in new metals to capture disruption-driven demand is expected to be sought from investors at the presentation. Rio is investigating the big Jadar discovery in Serbia, which could become the world’s third-biggest lithium mine, and has established a “Ventures” unit to look at investment in new commodities expected to experience demand growth due to disruptive technologies. Mr Jacques told Japan’s Nikkei newspaper this month that lithium was an example of the type of commodity that the Ventures unit was looking at. Rio is also reportedly weighing up a bid for a 32 per cent stake in Chilean lithium company SQM, valued at $US4.8 billion ($6.3bn).
Seek Limited (SEK):
Seek shares have slumped despite the job ads group upgrading its full-year earnings forecast, with the tipped 13 per cent rise seeming to fall short of expectations. Chief executive Andrew Bassat told the annual general meeting yesterday that pre-tax earnings for the fiscal year were expected to swell by about 13 per cent from last year, up from its previous forecast of 10 per cent growth. Mr Bassat said Seek was primed to take advantage of the “enormous” opportunity of the international market, which helped boost revenue by 48 per cent over the past three years. The company, whose operations span more than a dozen countries, has enjoyed a better-than-expected performance and last year hit $1bn in revenue for the first time in its 20-year history. “This is a big milestone given approximately 60 per cent of our revenue is now from international operations,” chairman Neil Chatfield told shareholders. Mr Bassat said the earnings performance of the Australian and New Zealand operations, Seek Asia and online education services so far this financial year had been encouraging. But he noted the company would have larger-than-expected interest costs related to its Chinese subsidiary, Zhaopin. Seek finished Zhaopin’s privatisation last month, partnering with private equity firms Hillhouse Capital Management and FountainVest Partners.
Transurban Group (TCL):
Transurban Group investors may be well advised to keep some cash on the sidelines this Christmas, with the tollroad company mulling a share issue to help pay for a $5.5 billion expansion project in Melbourne. The project is the West Gate Tunnel which Transurban is seeking to develop in partnership with the Victorian government. The new tunnel received environmental and planning approval this week, which moved it up the chain to the Victorian roads minister for approval, and later cabinet. Transurban has long told investors it is seeking to have the project approved and reach financial close by the end of this year. And it is understood that timetable has not changed. Financial close would trigger a $3.5 billion to $4 billion funding commitment for Transurban, split between debt and equity. While the tollroad company does not have to write a big cheque on day one, it has been working on funding options all year and is expected to move sooner rather than later. So expectations on equities desks are building of a $2 billion-odd equity raising heading into Christmas, provided the company can clear that final government hurdle. House advisers Morgan Stanley and UBS would be expected to handle the deal. Transurban chairman Lindsay Maxsted has not shied away from discussing the potential raising with investors.
(Source: AIMS)
Latest comments