AWE Limited (AWE):
China Energy Reserve and Chemical Group Australia has withdrawn its $430 million conditional bid to buy AWE. The offer was for 71c per share and AWE had earlier indicated that it would reject the proposal. After the offer — a 30 per cent premium to the last traded share price — was launched, AWE’s shares rallied 19 per cent. But this morning they remained at 70c as the company announced that the suitor had walked away. CERC, which has registered an Australian company, based in Perth, was thought to be focused on the AWE-operated Waitsia field, which will be 50 per cent owned by Beach Energy following its acquisition of Origin Energy’s Lattice business, and which has recently been returning strong flow test results. RBC analyst Ben Wilson, who noted it was the third takeover bid for AWE in three years, has previously said it undervalued the company, which he values at 91c per share.
BHP Billiton Limited & Rio Tinto (BHP & RIO):
Tax commissioner Chris Jordan has laid the groundwork for a blockbuster legal action against BHP Billiton and Rio Tinto, saying he is prepared to go to court against the two mining heavyweights on their much-publicised use of Singapore-based marketing hubs for tax purposes. Through the use of the “Singapore Sling”, BHP and Rio are ¬effectively able to “sell” commodities they have dug up in Australia, such as iron ore, to their marketing hub subsidiaries in Singapore, which has a much lower corporate tax regime. The commodities are then subsequently sold on, often with significant mark-ups, to China and other nations. Both companies are still in dispute over huge tax bills from the ATO over their use of Singapore marketing hubs: BHP for about $1 billion including tax, interest and penalties, and Rio for about $450 million in tax. Between 2006 and 2014, BHP sold about $US210bn worth of resources, including iron ore, to its Singapore subsidiary, which was subsequently sold on to BHP customers for $US235bn. This meant that after expenses, BHP’s Singapore subsidiary retained a profit of nearly $US6bn. This was taxed in Singapore, where the corporate tax rate is 17 per cent, instead of Australia, where it is 30 per cent.
Charter Hall Long Wale REIT (CLW):
Charter Hall’s Long Wale REIT has tapped the market for $94.1 million in order to buy the Virgin head office in Brisbane and refresh its balance sheet. Charter Hall has been active in Brisbane and is in the process of buying the city’s Santos Place ¬office building that was put on the block by -Malaysian government-backed investment group Permodalan Nasional. The state-supported group could reap about $350m from that sale. The raising, undertaken by investment bank UBS by way of a one-for-9.25 accelerated non--renounceable pro rata entitlement offer, was at $4.15 per security, a 3.5 per cent discount to Friday’s closing price. The move could be a sign that capital raisings are back in the property sector after very little new equity was issued for most of this year. The Charter Hall-run REIT also undertook an independent revaluation of properties representing 39 per cent of the portfolio’s value this month, reaping a $19.6m uplift.
CSL Limited (CSL):
Blood products giant CSL is down 0.7 per cent today after saying it will spend $US550 million ($A720 million) on phase three clinical trials of a new treatment aimed at preventing secondary heart attacks. The clinical trials of the potential breakthrough therapy, CSL112, will be the largest ever undertaken by CSL, and will enroll more than 17,000 patients from approximately 1,000 sites around the world to evaluate whether the drug can reduce cardiovascular events in high-risk patients during the critical 90 day period following a heart attack. If successful, CSL could have another blockbuster drug on its books, though experimental drugs can fail at the phase three trial stage even after successfully completing phase one and phase two trials as CSL112 has done.
South32 Limited (S32):
South32 is sticking with annual production targets but scaling back spending plans for the year. The mining company (S32) said it now expected sustaining capital expenditure of $US470 million for the year through to June, from an earlier target of $US500 million. About two-thirds of the reduction related to the deferral of underground development work at its Appin colliery in NSW, which was suspended earlier this year. The change comes a day after Rio Tinto reduced capital expenditure guidance for 2017 to less than $US4.5 billion from a prior target of $US5 billion as it sought additional productivity improvements at its mining operations in an effort to boost cash flow. South32 was spun out of BHP Billiton in 2015. Listed in Sydney, London and Johannesburg, the company’s operations range from energy coal used to fuel power stations, alumina and manganese to silver, nickel and zinc.
Telstra Corporation Limited (TLS):
The iPhone X is shaping up as a winner for Telstra even as analysts digest the latest earnings downgrade from the incumbent telco. According to Goldman Sachs, Telstra is outperforming Optus and Vodafone Hutchinson Australia on iPhone X pre-orders, with the burgeoning set to deliver a stronger second quarter in the 2018 financial year for Telstra. Goldman analysts estimated the iPhone X to be $10 a month more profitable per subscriber for Telstra than either the iPhone 7 or 8 — across its contract and leased plans. They added that the premium Telstra is charging on its -iPhone X (17 per cent) is in line with the premium on the iPhone 8 (18 per cent). With its iPhone X price premium unchanged and subscribers turning out to be more profitable, the impact of the latest iPhone is a rare positive for Telstra, which is facing increasing pressure in the mobile and fixed-line market.
Tinybeans Group Limited (TNY):
Tinybeans, a social media platform for parents, has struck a deal with American media giant Meredith Corporation in a bid to expand its user base. The Australian company (TNY) allows parents to document their child’s progress and milestones online and share them with family and friends. It listed in April. Tinybeans chief executive Eddie Geller said the partnership with Meredith would enable Tinybeans to expand is user base rapidly and increase revenues through its premium offering - where customers pay for additional features. Despite the announcement, Tinybeans shares were down 10 cents, or 14.3 per cent, at 60 cents a share at 12.13pm (AEDT), markedly below its $1.00 share price offer in April. The company’s market capitalisation has also fallen since listing on the Australian Securities Exchange, from $10.5 million in April, to a current $6.6 million.
(Source: AIMS)
China Energy Reserve and Chemical Group Australia has withdrawn its $430 million conditional bid to buy AWE. The offer was for 71c per share and AWE had earlier indicated that it would reject the proposal. After the offer — a 30 per cent premium to the last traded share price — was launched, AWE’s shares rallied 19 per cent. But this morning they remained at 70c as the company announced that the suitor had walked away. CERC, which has registered an Australian company, based in Perth, was thought to be focused on the AWE-operated Waitsia field, which will be 50 per cent owned by Beach Energy following its acquisition of Origin Energy’s Lattice business, and which has recently been returning strong flow test results. RBC analyst Ben Wilson, who noted it was the third takeover bid for AWE in three years, has previously said it undervalued the company, which he values at 91c per share.
BHP Billiton Limited & Rio Tinto (BHP & RIO):
Tax commissioner Chris Jordan has laid the groundwork for a blockbuster legal action against BHP Billiton and Rio Tinto, saying he is prepared to go to court against the two mining heavyweights on their much-publicised use of Singapore-based marketing hubs for tax purposes. Through the use of the “Singapore Sling”, BHP and Rio are ¬effectively able to “sell” commodities they have dug up in Australia, such as iron ore, to their marketing hub subsidiaries in Singapore, which has a much lower corporate tax regime. The commodities are then subsequently sold on, often with significant mark-ups, to China and other nations. Both companies are still in dispute over huge tax bills from the ATO over their use of Singapore marketing hubs: BHP for about $1 billion including tax, interest and penalties, and Rio for about $450 million in tax. Between 2006 and 2014, BHP sold about $US210bn worth of resources, including iron ore, to its Singapore subsidiary, which was subsequently sold on to BHP customers for $US235bn. This meant that after expenses, BHP’s Singapore subsidiary retained a profit of nearly $US6bn. This was taxed in Singapore, where the corporate tax rate is 17 per cent, instead of Australia, where it is 30 per cent.
Charter Hall Long Wale REIT (CLW):
Charter Hall’s Long Wale REIT has tapped the market for $94.1 million in order to buy the Virgin head office in Brisbane and refresh its balance sheet. Charter Hall has been active in Brisbane and is in the process of buying the city’s Santos Place ¬office building that was put on the block by -Malaysian government-backed investment group Permodalan Nasional. The state-supported group could reap about $350m from that sale. The raising, undertaken by investment bank UBS by way of a one-for-9.25 accelerated non--renounceable pro rata entitlement offer, was at $4.15 per security, a 3.5 per cent discount to Friday’s closing price. The move could be a sign that capital raisings are back in the property sector after very little new equity was issued for most of this year. The Charter Hall-run REIT also undertook an independent revaluation of properties representing 39 per cent of the portfolio’s value this month, reaping a $19.6m uplift.
CSL Limited (CSL):
Blood products giant CSL is down 0.7 per cent today after saying it will spend $US550 million ($A720 million) on phase three clinical trials of a new treatment aimed at preventing secondary heart attacks. The clinical trials of the potential breakthrough therapy, CSL112, will be the largest ever undertaken by CSL, and will enroll more than 17,000 patients from approximately 1,000 sites around the world to evaluate whether the drug can reduce cardiovascular events in high-risk patients during the critical 90 day period following a heart attack. If successful, CSL could have another blockbuster drug on its books, though experimental drugs can fail at the phase three trial stage even after successfully completing phase one and phase two trials as CSL112 has done.
South32 Limited (S32):
South32 is sticking with annual production targets but scaling back spending plans for the year. The mining company (S32) said it now expected sustaining capital expenditure of $US470 million for the year through to June, from an earlier target of $US500 million. About two-thirds of the reduction related to the deferral of underground development work at its Appin colliery in NSW, which was suspended earlier this year. The change comes a day after Rio Tinto reduced capital expenditure guidance for 2017 to less than $US4.5 billion from a prior target of $US5 billion as it sought additional productivity improvements at its mining operations in an effort to boost cash flow. South32 was spun out of BHP Billiton in 2015. Listed in Sydney, London and Johannesburg, the company’s operations range from energy coal used to fuel power stations, alumina and manganese to silver, nickel and zinc.
Telstra Corporation Limited (TLS):
The iPhone X is shaping up as a winner for Telstra even as analysts digest the latest earnings downgrade from the incumbent telco. According to Goldman Sachs, Telstra is outperforming Optus and Vodafone Hutchinson Australia on iPhone X pre-orders, with the burgeoning set to deliver a stronger second quarter in the 2018 financial year for Telstra. Goldman analysts estimated the iPhone X to be $10 a month more profitable per subscriber for Telstra than either the iPhone 7 or 8 — across its contract and leased plans. They added that the premium Telstra is charging on its -iPhone X (17 per cent) is in line with the premium on the iPhone 8 (18 per cent). With its iPhone X price premium unchanged and subscribers turning out to be more profitable, the impact of the latest iPhone is a rare positive for Telstra, which is facing increasing pressure in the mobile and fixed-line market.
Tinybeans Group Limited (TNY):
Tinybeans, a social media platform for parents, has struck a deal with American media giant Meredith Corporation in a bid to expand its user base. The Australian company (TNY) allows parents to document their child’s progress and milestones online and share them with family and friends. It listed in April. Tinybeans chief executive Eddie Geller said the partnership with Meredith would enable Tinybeans to expand is user base rapidly and increase revenues through its premium offering - where customers pay for additional features. Despite the announcement, Tinybeans shares were down 10 cents, or 14.3 per cent, at 60 cents a share at 12.13pm (AEDT), markedly below its $1.00 share price offer in April. The company’s market capitalisation has also fallen since listing on the Australian Securities Exchange, from $10.5 million in April, to a current $6.6 million.
(Source: AIMS)
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