BlueScope Steel Limited (BSL):
BlueScope Steel looks to be a big winner from Donald Trump’s steel tariffs, which could boost earnings by $US150 million ($194m) a year or more at its Ohio steel mill, despite fears the US action could be the first step in a full-blown trade war. The earnings boost for BlueScope is more than the entire value of Australian steel exports to the US, but has not yet flowed to the steelmaker’s share price, as investors focus on the potential for a trade war that could halve global growth. Experts and investors say the action on steel and aluminium is likely a prelude to a bigger action against China for breaches of intellectual property rights, and moves to renegotiate some of the US’s main trade agreements.
Fairfax Media Limited (FXJ):
Fairfax Media has scrapped its agreement to merge its New Zealand business Stuff with NZME, as it prepares to appeal a High Court decision blocking the deal. In a statement to the market this morning, Fairfax said that, given the changes to the business since the merger implementation agreement was signed in September 2016, new commercial terms would need to be signed for the deal to proceed. “The parties will continue with the Court of Appeal proceeding regarding the proposed merger of the two businesses,” the statement said. “If the appeal is successful, the parties intend to negotiate a new agreement to realise the significant benefits of merging the operations of Stuff Limited and NZME.” The New Zealand Commerce Commission last year heard that the merger, which would cover 90 per cent of the nation’s daily newspaper circulation, could save the media companies up to $200 million over five years. The regulator blocked the deal, citing concerns about a reduction in the quality of news produced and “plurality” or diversity of voices. Its decision was upheld by the New Zealand High Court in October. A further appeal will be heard in New Zealand’s Court of Appeal over four days from June 5.
Graincorp Ltd (GNC):
GrainCorp’s terminal assets have been on the radar of deal-makers in the past, but some are now wondering whether the boardroom chatter is once again on whether to offload them. One of the challenges for the $8 billion listed grain logistics provider is that it requires funds to maintain the terminals, and the pitch at the time of the $3.4bn mooted takeover of the company by Archer Daniels Midland in 2013 was that the deal was supposed to provide the money needed to carry out that work. The deal was blocked, though, by the Foreign Investment Review Board. With a lack of infrastructure assets on the market in Australia — the Sydney motorway network WestConnex being the exception — there are perhaps prospective buyers knocking at GrainCorp’s door to find out if the terminals are for sale.
Lynas Corporation Ltd (LYC):
ASX-listed rare earths company Lynas is in talks with the Turnbull government about working with the Trump administration to sell more rare earths to the US. Lynas chief executive Amanda Lacaze said yesterday the company had made contact with Prime Minister Malcolm Turnbull’s office after the agreement reached during his visit to Washington two weeks ago. While the deal between Australia and the US to “work together on the development of rare earths” and other “high performance metals” was struck without reference to the company, Lynas is the only Australian company producing rare earths, in a market dominated by Chinese producers. “We have made contact with the Prime Minister’s office and discussed the background and next steps,” Ms Lacaze told The Australian yesterday..
Retail Food Group Limited (RFG):
Shares in franchise business Retail Food Group sank 50 per cent to a 10-year low as trade resumed yesterday, following its suspension and announcement of a first-half profit plunge last week. Retail Food Group shares were suspended from trade by the ASX on Thursday following its failure to lodge its first-half result. On Friday, the owner of brands including Donut King and Gloria Jean’s unveiled a net loss after tax of $87.8 million for the first half, compared to a restated $32.7m net profit after tax in the previous corresponding period, blaming unsustainable rent and declining shopping centre performance as it announced the closure of between 160 and 200 stores. Resuming trade yesterday, the company’s shares plunged at the open, sinking 50 per cent to $1.03 at their lowest point before recovering to close at $1.295. The poor result followed two profit warnings in less than a month, with the Retail Food Group saying in January that its first-half result would be “materially less” than the previous year.
Telstra (TLS):
News Corp and Telstra have signed definitive agreements to combine Foxtel and Fox Sports, effectively clearing away the final hurdle to the combination of Australia’s biggest pay-TV broadcaster with the country’s leading sports programmer. After months of talks, shareholders on both sides reached an agreement ahead of schedule, paving the way for a formation of a sports and entertainment player with combined annual revenues of more than $3 billion. Key terms include News Corp holding a 65 per cent shareholding in the combined entity, with Telstra owning the remaining 35 per cent. Currently News Corp and Telstra are joint shareholders in Foxtel. Fox Sports is wholly owned by News. News Corp, which will consolidate the combined entity into its financial statements, will appoint four directors including the chairman to the company’s board and the senior executives, and Telstra will appoint two directors. The transaction is expected to close during the fourth quarter of financial year 2018.
(Source: AIMS)
BlueScope Steel looks to be a big winner from Donald Trump’s steel tariffs, which could boost earnings by $US150 million ($194m) a year or more at its Ohio steel mill, despite fears the US action could be the first step in a full-blown trade war. The earnings boost for BlueScope is more than the entire value of Australian steel exports to the US, but has not yet flowed to the steelmaker’s share price, as investors focus on the potential for a trade war that could halve global growth. Experts and investors say the action on steel and aluminium is likely a prelude to a bigger action against China for breaches of intellectual property rights, and moves to renegotiate some of the US’s main trade agreements.
Fairfax Media Limited (FXJ):
Fairfax Media has scrapped its agreement to merge its New Zealand business Stuff with NZME, as it prepares to appeal a High Court decision blocking the deal. In a statement to the market this morning, Fairfax said that, given the changes to the business since the merger implementation agreement was signed in September 2016, new commercial terms would need to be signed for the deal to proceed. “The parties will continue with the Court of Appeal proceeding regarding the proposed merger of the two businesses,” the statement said. “If the appeal is successful, the parties intend to negotiate a new agreement to realise the significant benefits of merging the operations of Stuff Limited and NZME.” The New Zealand Commerce Commission last year heard that the merger, which would cover 90 per cent of the nation’s daily newspaper circulation, could save the media companies up to $200 million over five years. The regulator blocked the deal, citing concerns about a reduction in the quality of news produced and “plurality” or diversity of voices. Its decision was upheld by the New Zealand High Court in October. A further appeal will be heard in New Zealand’s Court of Appeal over four days from June 5.
Graincorp Ltd (GNC):
GrainCorp’s terminal assets have been on the radar of deal-makers in the past, but some are now wondering whether the boardroom chatter is once again on whether to offload them. One of the challenges for the $8 billion listed grain logistics provider is that it requires funds to maintain the terminals, and the pitch at the time of the $3.4bn mooted takeover of the company by Archer Daniels Midland in 2013 was that the deal was supposed to provide the money needed to carry out that work. The deal was blocked, though, by the Foreign Investment Review Board. With a lack of infrastructure assets on the market in Australia — the Sydney motorway network WestConnex being the exception — there are perhaps prospective buyers knocking at GrainCorp’s door to find out if the terminals are for sale.
Lynas Corporation Ltd (LYC):
ASX-listed rare earths company Lynas is in talks with the Turnbull government about working with the Trump administration to sell more rare earths to the US. Lynas chief executive Amanda Lacaze said yesterday the company had made contact with Prime Minister Malcolm Turnbull’s office after the agreement reached during his visit to Washington two weeks ago. While the deal between Australia and the US to “work together on the development of rare earths” and other “high performance metals” was struck without reference to the company, Lynas is the only Australian company producing rare earths, in a market dominated by Chinese producers. “We have made contact with the Prime Minister’s office and discussed the background and next steps,” Ms Lacaze told The Australian yesterday..
Retail Food Group Limited (RFG):
Shares in franchise business Retail Food Group sank 50 per cent to a 10-year low as trade resumed yesterday, following its suspension and announcement of a first-half profit plunge last week. Retail Food Group shares were suspended from trade by the ASX on Thursday following its failure to lodge its first-half result. On Friday, the owner of brands including Donut King and Gloria Jean’s unveiled a net loss after tax of $87.8 million for the first half, compared to a restated $32.7m net profit after tax in the previous corresponding period, blaming unsustainable rent and declining shopping centre performance as it announced the closure of between 160 and 200 stores. Resuming trade yesterday, the company’s shares plunged at the open, sinking 50 per cent to $1.03 at their lowest point before recovering to close at $1.295. The poor result followed two profit warnings in less than a month, with the Retail Food Group saying in January that its first-half result would be “materially less” than the previous year.
Telstra (TLS):
News Corp and Telstra have signed definitive agreements to combine Foxtel and Fox Sports, effectively clearing away the final hurdle to the combination of Australia’s biggest pay-TV broadcaster with the country’s leading sports programmer. After months of talks, shareholders on both sides reached an agreement ahead of schedule, paving the way for a formation of a sports and entertainment player with combined annual revenues of more than $3 billion. Key terms include News Corp holding a 65 per cent shareholding in the combined entity, with Telstra owning the remaining 35 per cent. Currently News Corp and Telstra are joint shareholders in Foxtel. Fox Sports is wholly owned by News. News Corp, which will consolidate the combined entity into its financial statements, will appoint four directors including the chairman to the company’s board and the senior executives, and Telstra will appoint two directors. The transaction is expected to close during the fourth quarter of financial year 2018.
(Source: AIMS)
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