AWE Limited (AWE):
Japanese heavyweight Mitsui has won the three-way battle for control of oil and gas play AWE, after rival suitor Mineral Resources opted not to match Mitsui’s $602 million offer. The board of AWE yesterday formally recommended Mitsui’s 95c a share bid after, as expected, MinRes dropped out. Mitsui’s takeover of AWE, codenamed Project Atom, saw it pounce on AWE after the group was first brought into play in November through a 73c a share offer from China Energy Reserve and Chemicals Group. CERCG’s offer was then trumped by a higher bid from MinRes, which offered a combination of cash and MinRes stock that valued AWE at 83c a share. The Mitsui offer is conditional on the Japanese group securing at least 50.1 per cent acceptances.
BHP Billiton Limited (BHP):
BHP Billiton could add $28 billion of value by getting rid of its dual-listed structure in favour of an Australian listing, according to New York activist fund Elliott, which has commissioned a report on dissolving the dual-listing by FTI consulting. The move has the potential to raise Australian retail and institutional ownership of the nation’s biggest company from about 41 per cent now to 60 per cent, the report claims. The report is the first substantial volley fired by Elliott — which has successfully pushed BHP into selling its US shale assets — since Ken MacKenzie became BHP chairman in October. It has been timed two week’s before BHP’s interim results on February 20, when chief executive Andrew Mackenzie faces investors and the media.
Commonwealth Bank of Australia (CBA):
Commonwealth Bank’s outgoing chief executive Ian Narev will deliver his final set of results tomorrow. The man who will replace him, Matt Comyn, will not assume control of Australia’s largest bank until April 9. Investors and analysts say this will give him plenty of time to plot the changes he intends to put in place. The most obvious question is what the bank’s top executive committee looks like once Mr Comyn is in place. There is speculation that a reshuffle at the top is on the cards.
Downer EDI Limited (DOW):
The mining services sector recovery has come too late for the mining arm of Downer EDI, with the contracting group writing off the remainder of the goodwill value attached to the unit. Downer blamed the decision to take a $77 million impairment on the value of its mining business on the recent loss of two of the arm’s biggest contracts. Downer lost the $500m-a-year job running Fortescue Metal Group’s Christmas Creek iron ore mine back in 2016, depriving it of its single biggest contract, while late last year it ended work at Idemitsu’s Boggabri coalmine, “Mining’s historic high levels of returns have reduced significantly due to non-renewal of two material contracts and delays in securing alternative contracts,” the company said. “Downer remains positive in relation to mining’s prospects, however the estimated future cash flows for the mining business do not support the carrying value of the previously acquired goodwill.” The goodwill written down yesterday traces back to acquisition of Roche Mining in 1997.
Fairfax Media Limited (FXJ):
Fairfax Media will try to salvage a merger between its New Zealand operations and rival NZME by challenging a High Court decision blocking the deal. The two companies will contest the decision after the New Zealand High Court upheld a ruling by the country’s competition watchdog to block a merger of their local assets. The New Zealand Commerce Commission concluded a merger would lessen competition for advertising and readers after considering it for almost a year, although it accepted the deal could extend the lifespan of some newspapers and deliver significant cost savings. Fairfax and NZME believe that enough consideration has not been given to the dominance of the Google and Facebook digital advertising duopoly, which is putting publishers under enormous pressure as they attempt to entice subscribers and attract ad dollars. The companies said their appeal would focus on the issue of plurality.
Integral Diagnostics Limited (IDX):
Executives at British based private equity firm Permira may be sharpening their pencils in the weeks ahead to determine whether to make a play for Integral Diagnostics. It comes after the Integral Diagnostics (IDX) board today rejected a cash and scrip takeover bid by its smaller rival Capitol Health, with the board describing the offer as opportunistic. Permira entered the competition to buy Integral Diagnostics’ larger rival I-Med last year, as revealed by The Australian’s DataRoom column at the time, and after the sales process collapsed late last year, it later came back to buy the business for a price said to value the operation at more than $1.2 billion. Before it was sold, I-Med’s advisers at the time -Morgan Stanley and Rothschild — had been talking up the growth prospects of the group, saying its strategy was to buy rival Integral Diagnostics, which had been undervalued. Capitol Health, interestingly, has also been taking advice from Rothschild on its tilt at Integral Diagnostics.
Joyce Corporation Ltd (JYC):
At a time when so many investors are focused on technology and growth, it is understandable why the market is less interested in a seemingly old-economy company like Joyce Corporation. Joyce’s origins go back over 130 years, and at one point was Australia’s largest foam and furniture manufacturer, before morphing into an investment holding company in recent years. One of the beauties of investing, however, is that sometimes the most interesting investment opportunities are hidden in obscure places. In this case, it may come as a surprise to many that Joyce has a controlling interest in one of the fastest growing businesses on the ASX — Lloyds Online Auctions. Every day, Lloyds auctions hundreds of diverse items ranging from classic cars to high end jewellery to multi-million-dollar major electronic brand clearances.
Macquarie Group Limited (MQG):
Macquarie Group expects to lift full-year profit by about 10 per cent on last year’s record $2.2 billion. Macquarie says trading conditions were satisfactory in the December quarter, with the net profit contribution from annuity-style businesses rising following strong performance fees from Macquarie Asset Management and growth in banking and financial services. Chief executive Nicholas Moore says Macquarie continues to benefit from its “ability to adapt the portfolio mix to changing market conditions”.
Magellan Financial Group Limited (MFG):
Fund manager Magellan has acquired Australian equity house Airlie and its North American distribution partner Frontier Partners Group for a total consideration of $19 million and 4.5 million Magellan shares. Airlie and Magellan now intend to launch an active ETF quoted on ASX named the “Airlie Industrial Share Fund” “The partnership with Frontier and Bill Forsyth has been a real success story for Magellan, representing A$12.8 billion of funds under management,” said Magellan boss and founder Hamish Douglass, “Bill has played a pivotal role in the development of our relationships with key institutional clients and asset consultants in North America.”
REA Group Ltd (REA):
REA Group has hired a new chief for its shared work space website Spacely, former Startup Victoria chief executive Georgia Beattie. Launched in May last year, Spacely is now the number one listings site for flexible workspace and short-term commercial listings, and the company has flagged a global expansion. “Through my role at Startup Victoria, I’ve been able to really see where Australia has good capability, and it’s really strong with marketplaces. REA one of the original marketplaces in Australia,” Ms Beattie told The Australian.
Shopping Centres Australasia Property Group (SCP) & Woolworths Group Limited(WOW):
Shopping Centres Australasia Property Group lifted its target for annual funds from operations and distributions, as it benefited from the business turnaround at supermarket chain Woolworths. The company (SCP), which mostly owns malls spun out of Woolworths (WOW) in 2012, said it now expects funds from operations in the year through June of 15.3 cents per unit and an annual distribution of 13.9 cents. That represented an upgrade of prior guidance of 15.1 cents per unit and 13.1 cents, respectively. The revised target came alongside a 66 per cent fall in half-year profit as a large uplift in the valuation of Shopping Centres Australasia’s investment properties a year ago wasn’t repeated. The company reported a net profit of $69.6 million in the six months through December, down from $204.7m a year earlier. Shopping Centres Australasia said its funds from operations rose by 4.9 per cent to $56.1m during the half year.
Wesfarmers Limited (WES):
Wesfarmers took another tumble this morning, slumping off the back of the $1.3 billion in writedowns against Bunnings UK and Target announced on Monday as well as falling in sentiment with the ructions on Wall Street. Shares in Wesfarmers were down more than 3 per cent in early trade, following a similar fall on Monday, with around $5 billion in value stripped from the Perth-based conglomerate’s market valuation in the last 24 hours. Analysts this morning began slashing their valuations and earnings outlooks for Wesfarmers as they also begin to calculate the cost of the company deciding to sell or close down its struggling Bunnings UK chain.
(Source: AIMS)
Japanese heavyweight Mitsui has won the three-way battle for control of oil and gas play AWE, after rival suitor Mineral Resources opted not to match Mitsui’s $602 million offer. The board of AWE yesterday formally recommended Mitsui’s 95c a share bid after, as expected, MinRes dropped out. Mitsui’s takeover of AWE, codenamed Project Atom, saw it pounce on AWE after the group was first brought into play in November through a 73c a share offer from China Energy Reserve and Chemicals Group. CERCG’s offer was then trumped by a higher bid from MinRes, which offered a combination of cash and MinRes stock that valued AWE at 83c a share. The Mitsui offer is conditional on the Japanese group securing at least 50.1 per cent acceptances.
BHP Billiton Limited (BHP):
BHP Billiton could add $28 billion of value by getting rid of its dual-listed structure in favour of an Australian listing, according to New York activist fund Elliott, which has commissioned a report on dissolving the dual-listing by FTI consulting. The move has the potential to raise Australian retail and institutional ownership of the nation’s biggest company from about 41 per cent now to 60 per cent, the report claims. The report is the first substantial volley fired by Elliott — which has successfully pushed BHP into selling its US shale assets — since Ken MacKenzie became BHP chairman in October. It has been timed two week’s before BHP’s interim results on February 20, when chief executive Andrew Mackenzie faces investors and the media.
Commonwealth Bank of Australia (CBA):
Commonwealth Bank’s outgoing chief executive Ian Narev will deliver his final set of results tomorrow. The man who will replace him, Matt Comyn, will not assume control of Australia’s largest bank until April 9. Investors and analysts say this will give him plenty of time to plot the changes he intends to put in place. The most obvious question is what the bank’s top executive committee looks like once Mr Comyn is in place. There is speculation that a reshuffle at the top is on the cards.
Downer EDI Limited (DOW):
The mining services sector recovery has come too late for the mining arm of Downer EDI, with the contracting group writing off the remainder of the goodwill value attached to the unit. Downer blamed the decision to take a $77 million impairment on the value of its mining business on the recent loss of two of the arm’s biggest contracts. Downer lost the $500m-a-year job running Fortescue Metal Group’s Christmas Creek iron ore mine back in 2016, depriving it of its single biggest contract, while late last year it ended work at Idemitsu’s Boggabri coalmine, “Mining’s historic high levels of returns have reduced significantly due to non-renewal of two material contracts and delays in securing alternative contracts,” the company said. “Downer remains positive in relation to mining’s prospects, however the estimated future cash flows for the mining business do not support the carrying value of the previously acquired goodwill.” The goodwill written down yesterday traces back to acquisition of Roche Mining in 1997.
Fairfax Media Limited (FXJ):
Fairfax Media will try to salvage a merger between its New Zealand operations and rival NZME by challenging a High Court decision blocking the deal. The two companies will contest the decision after the New Zealand High Court upheld a ruling by the country’s competition watchdog to block a merger of their local assets. The New Zealand Commerce Commission concluded a merger would lessen competition for advertising and readers after considering it for almost a year, although it accepted the deal could extend the lifespan of some newspapers and deliver significant cost savings. Fairfax and NZME believe that enough consideration has not been given to the dominance of the Google and Facebook digital advertising duopoly, which is putting publishers under enormous pressure as they attempt to entice subscribers and attract ad dollars. The companies said their appeal would focus on the issue of plurality.
Integral Diagnostics Limited (IDX):
Executives at British based private equity firm Permira may be sharpening their pencils in the weeks ahead to determine whether to make a play for Integral Diagnostics. It comes after the Integral Diagnostics (IDX) board today rejected a cash and scrip takeover bid by its smaller rival Capitol Health, with the board describing the offer as opportunistic. Permira entered the competition to buy Integral Diagnostics’ larger rival I-Med last year, as revealed by The Australian’s DataRoom column at the time, and after the sales process collapsed late last year, it later came back to buy the business for a price said to value the operation at more than $1.2 billion. Before it was sold, I-Med’s advisers at the time -Morgan Stanley and Rothschild — had been talking up the growth prospects of the group, saying its strategy was to buy rival Integral Diagnostics, which had been undervalued. Capitol Health, interestingly, has also been taking advice from Rothschild on its tilt at Integral Diagnostics.
Joyce Corporation Ltd (JYC):
At a time when so many investors are focused on technology and growth, it is understandable why the market is less interested in a seemingly old-economy company like Joyce Corporation. Joyce’s origins go back over 130 years, and at one point was Australia’s largest foam and furniture manufacturer, before morphing into an investment holding company in recent years. One of the beauties of investing, however, is that sometimes the most interesting investment opportunities are hidden in obscure places. In this case, it may come as a surprise to many that Joyce has a controlling interest in one of the fastest growing businesses on the ASX — Lloyds Online Auctions. Every day, Lloyds auctions hundreds of diverse items ranging from classic cars to high end jewellery to multi-million-dollar major electronic brand clearances.
Macquarie Group Limited (MQG):
Macquarie Group expects to lift full-year profit by about 10 per cent on last year’s record $2.2 billion. Macquarie says trading conditions were satisfactory in the December quarter, with the net profit contribution from annuity-style businesses rising following strong performance fees from Macquarie Asset Management and growth in banking and financial services. Chief executive Nicholas Moore says Macquarie continues to benefit from its “ability to adapt the portfolio mix to changing market conditions”.
Magellan Financial Group Limited (MFG):
Fund manager Magellan has acquired Australian equity house Airlie and its North American distribution partner Frontier Partners Group for a total consideration of $19 million and 4.5 million Magellan shares. Airlie and Magellan now intend to launch an active ETF quoted on ASX named the “Airlie Industrial Share Fund” “The partnership with Frontier and Bill Forsyth has been a real success story for Magellan, representing A$12.8 billion of funds under management,” said Magellan boss and founder Hamish Douglass, “Bill has played a pivotal role in the development of our relationships with key institutional clients and asset consultants in North America.”
REA Group Ltd (REA):
REA Group has hired a new chief for its shared work space website Spacely, former Startup Victoria chief executive Georgia Beattie. Launched in May last year, Spacely is now the number one listings site for flexible workspace and short-term commercial listings, and the company has flagged a global expansion. “Through my role at Startup Victoria, I’ve been able to really see where Australia has good capability, and it’s really strong with marketplaces. REA one of the original marketplaces in Australia,” Ms Beattie told The Australian.
Shopping Centres Australasia Property Group (SCP) & Woolworths Group Limited(WOW):
Shopping Centres Australasia Property Group lifted its target for annual funds from operations and distributions, as it benefited from the business turnaround at supermarket chain Woolworths. The company (SCP), which mostly owns malls spun out of Woolworths (WOW) in 2012, said it now expects funds from operations in the year through June of 15.3 cents per unit and an annual distribution of 13.9 cents. That represented an upgrade of prior guidance of 15.1 cents per unit and 13.1 cents, respectively. The revised target came alongside a 66 per cent fall in half-year profit as a large uplift in the valuation of Shopping Centres Australasia’s investment properties a year ago wasn’t repeated. The company reported a net profit of $69.6 million in the six months through December, down from $204.7m a year earlier. Shopping Centres Australasia said its funds from operations rose by 4.9 per cent to $56.1m during the half year.
Wesfarmers Limited (WES):
Wesfarmers took another tumble this morning, slumping off the back of the $1.3 billion in writedowns against Bunnings UK and Target announced on Monday as well as falling in sentiment with the ructions on Wall Street. Shares in Wesfarmers were down more than 3 per cent in early trade, following a similar fall on Monday, with around $5 billion in value stripped from the Perth-based conglomerate’s market valuation in the last 24 hours. Analysts this morning began slashing their valuations and earnings outlooks for Wesfarmers as they also begin to calculate the cost of the company deciding to sell or close down its struggling Bunnings UK chain.
(Source: AIMS)
Latest comments