AGL Energy Ltd (AGL):
Electricity retailers are on notice to pass on sharp falls in the wholesale price of electricity after AGL Energy rejected the federal government’s preferred plan to inject more competition into the market by selling its Liddell power station to rival Alinta. Energy Minister Josh Frydenberg said he was disappointed in AGL’s decision but said the government would not act on demands from some party members, including former prime minister Tony Abbott, that it compulsorily acquire Liddell from AGL and onsell it to Alinta. Mr Frydenberg said wholesale power prices in the national electricity market had fallen nearly 30 per cent in the past year and highlighted the Australian Competition & Consumer Commission’s final report on retail electricity prices next month as a signal for retailers. “Given this, customers are entitled to expect to see lower wholesale prices passed through to them in the next round of retail price determinations in July,” he said. Energy futures on the ASX show eastern seaboard wholesale electricity prices have dropped from $84 per megawatt hour year ago to $71/Mwh. They were above $100 in most states earlier in 2017.
AGL Energy Ltd (AGL):
Pro-coal MPs in the Coalition partyroom have called on Malcolm Turnbull to amend competition laws to force AGL to sell Liddell power station to Alinta. Craig Kelly, backed by Tony Abbott, called for the competition watchdog to be given new powers that would make it “crystal clear” that closing down a essential service utility when there were “other options”, such as selling to another player, was anti-competitive behaviour. Mr Abbott endorsed the proposal, saying Liddell was an essential services and “we can’t stand by and watch” while it closed down. The Prime Minister referred the question to Energy Minister Josh Frydenberg who said the government would be in a better position to comment after the ACCC completed its inquiry into the electricity market in June. Barnaby Joyce also addressed the partyroom, saying the government could not allow AGL to “keep jerking us around”.
APN Outdoor Group Ltd (APO):
APN Outdoor Group has confirmed via an announcement to the Australian Securities Exchange that its bid for HT&E’s Adshel business is worth $500 million. APN Outdoor (APO) put out a second statement to the market this morning confirming the price after last night confirming to the market that it had made an approach for the outdoor advertising arm of HT&E (HT1). This was in response to reports by The Australian online that APN Outdoor was a suitor of the operation. APN Outdoor says the proposal is subject to a range of conditions, including due diligence, definitive agreements and applicable regulatory approvals with the Australian Competition and Consumer Commission or the New Zealand Competition Commission.
BWX Ltd (BWX):
Private equity group Bain Capital has swooped on beaten-down branded skin and hair care products company BWX Limited, last night revealing it was backing an $860 million management buyout for the listed company. The aggressive play comes in the wake of a split over the company’s direction after the one-time market darling’s shares plunged in February on the back of a profit warning as its fast-paced local expansion strategy came unstuck and analysts slashed forecasts. Bain Capital has now teamed with BWX chief executive John Humble and finance director Aaron Finlay to lob an unsolicited, preliminary, non-binding, indicative and conditional proposal for the company. Bain and the two executives, who control of a 10.38 per cent slice of the company, are offering investors a choice between $6.60 cash per share and a scrip alternative where they would receive 75 per cent in shares in a new unlisted vehicle and 25 per cent in cash.
Healthscope Ltd (HSO):
Healthscope has refused to open its books to two groups seeking to buy the company, and said it would consider boosting returns for shareholders through a potential sale and leaseback of its Australian private hospitals. Healthscope (HSO) said it wouldn’t allow Brookfield Asset Management or a consortium led by BGH Capital and AustralianSuper, one of the country’s largest pension-savings funds, to carry out due diligence after each made indicative bids worth more than $4 billion. It said the proposals undervalued Healthscope, given the group’s improving performance.“The board is committed to maximizing value for shareholders and has decided to commence a strategic review of Healthscope’s substantial freehold property portfolio,” Healthscope said. It owns 29 freehold properties that management expect “to have a market value well in excess of their current book value of approximately $1.3 billion.”
IOOF Holdings Limited (IFL):
Wealth manager IOOF may be forced to face a long-awaited shareholder class action after the Federal Court ruled the company must disclose documents relevant to an alleged frontrunning scandal that sparked a sharp tumble in the group’s share price. The court order requires the $3 billion ASX-listed IOOF to disclose documents related to allegations of misconduct. The disclosure, to ACA Lawyers and litigation funders Investor Claim Partner and Litigation Lending Services, will allow the groups to decide if they want to launch a class-action suit. IOOF’s share price posted its largest ever one-day fall in 2015, after a whistleblower blew the lid on misconduct within the group’s research division, going as far back as 2009. The 13 per cent fall in the stock caused the Australian Securities & Investments Commission to launch a probe into allegations that head of research Peter Hilton, who has since stepped down, was frontrunning trades ahead of releasing research to clients.
James Hardie Industries plc (JHX):
Building materials supplier James Hardie has posted a plunge in full-year net profit, in part due to a higher number of asbestos compensation claims. The company said net profit fell 47 per cent to $US146.1 million, driven by a 5 per cent increase in claims for asbestosrelated disease, acquisition costs and debt. The larger asbestos liabilities, as well as the loss on early debt extinguishment and acquisition costs, triggered a net operating loss for the fourth quarter of $US57.6m, compared to a profit of $US44.5m in the fourth quarter last year. This was partially offset by an income tax benefit and the favourable underlying performance of the operating business units, the company said. For the full year to March 31, net operating profit fell 47 per cent to $US146.1m, down from $US276.5m last year. On an adjusted basis, net operating profit for the year hiked up 17 per cent to $US291.3m for the full year.
National Australia Bank Ltd (NAB):
National Australia Bank has foreshadowed a revision of executive pay practices that will include incentives linked to treatment of customers as part of a sweeping overhaul of its culture spurred by the royal commission. NAB chairman Ken Henry said the new policy would be simpler to understand, reward long-term performance — including by deferring bonuses — and “incentivise the right behaviours, especially with respect to the treatment of customers”. The new approach, which will apply from next year, comes as the bank aims to implement all of the recommendations of the Sedgwick Review of bank pay by 2020. NAB has already replaced product-based incentives for 700 retail branch managers, assistant branch managers, and sales team leaders in consumer call centres with a group incentive based on a “balanced scorecard and NAB performance”.
Santos Ltd (STO):
Private US firm Harbour Energy has declared its latest offer of $14.5 billion for Santos is “best and final”, leaving it to the Adelaide icon’s board to decide whether to recommend to shareholders what would be Australia’s biggest resources takeover. Harbour yesterday sweetened a previously disclosed $US4.98 per share bid to $US5.21 ($6.95 at current exchange rates) after extensive discussions with the Santos board that had made it clear recent oil price gains and company performance required a higher bid. Santos shares rose 11c, or 1.8 per cent, to $6.36 on the new offer, with the gap to the $6.95 offer price illustrating uncertainty around whether the deal will be completed even if the board recommends it. The conditional bid has also come with some extra complication and uncertainty in that it will require Santos to increase its oil price hedging to get it through. But shareholders indicated they did not believe the hedging requirements were a big hurdle to a deal that has been in the works since August and on which Harbour, headed by former Shell executive Linda Cook and managed by EIG Global Energy Partners, has recently conducted five weeks of due diligence.
Telstra Corporation Ltd (TLS):
Telstra cannot explain why millions of customers were left stranded without a mobile service after its 4G services were knocked out of action and its back-up system again failed to handle the impact of a large -service disruption. The disruption yesterday left customers unable to use data services and make calls, and prompted NSW police to warn that it could prevent people from reaching emergency services. Telstra was also unable to say how many customers were affected by the problem. It was the third major outage in three weeks for Telstra, which charges a premium for its mobile services, and comes as it scrambles to convince investors that it can maintain its position as the market leader. Telstra’s share price is near an eight-year low, with more than $4 billion wiped off its books over the course of a week. Investors were spooked last week after Telstra told the market its full-year earnings had been further undercut by -increased competition in the mobile market and the ongoing impact of the National Broadband Network on its earnings. Since taking over as chief executive in May 2015, Andrew Penn has seen more than $45bn scorched under his watch.
(Source: AIMS)
Electricity retailers are on notice to pass on sharp falls in the wholesale price of electricity after AGL Energy rejected the federal government’s preferred plan to inject more competition into the market by selling its Liddell power station to rival Alinta. Energy Minister Josh Frydenberg said he was disappointed in AGL’s decision but said the government would not act on demands from some party members, including former prime minister Tony Abbott, that it compulsorily acquire Liddell from AGL and onsell it to Alinta. Mr Frydenberg said wholesale power prices in the national electricity market had fallen nearly 30 per cent in the past year and highlighted the Australian Competition & Consumer Commission’s final report on retail electricity prices next month as a signal for retailers. “Given this, customers are entitled to expect to see lower wholesale prices passed through to them in the next round of retail price determinations in July,” he said. Energy futures on the ASX show eastern seaboard wholesale electricity prices have dropped from $84 per megawatt hour year ago to $71/Mwh. They were above $100 in most states earlier in 2017.
AGL Energy Ltd (AGL):
Pro-coal MPs in the Coalition partyroom have called on Malcolm Turnbull to amend competition laws to force AGL to sell Liddell power station to Alinta. Craig Kelly, backed by Tony Abbott, called for the competition watchdog to be given new powers that would make it “crystal clear” that closing down a essential service utility when there were “other options”, such as selling to another player, was anti-competitive behaviour. Mr Abbott endorsed the proposal, saying Liddell was an essential services and “we can’t stand by and watch” while it closed down. The Prime Minister referred the question to Energy Minister Josh Frydenberg who said the government would be in a better position to comment after the ACCC completed its inquiry into the electricity market in June. Barnaby Joyce also addressed the partyroom, saying the government could not allow AGL to “keep jerking us around”.
APN Outdoor Group Ltd (APO):
APN Outdoor Group has confirmed via an announcement to the Australian Securities Exchange that its bid for HT&E’s Adshel business is worth $500 million. APN Outdoor (APO) put out a second statement to the market this morning confirming the price after last night confirming to the market that it had made an approach for the outdoor advertising arm of HT&E (HT1). This was in response to reports by The Australian online that APN Outdoor was a suitor of the operation. APN Outdoor says the proposal is subject to a range of conditions, including due diligence, definitive agreements and applicable regulatory approvals with the Australian Competition and Consumer Commission or the New Zealand Competition Commission.
BWX Ltd (BWX):
Private equity group Bain Capital has swooped on beaten-down branded skin and hair care products company BWX Limited, last night revealing it was backing an $860 million management buyout for the listed company. The aggressive play comes in the wake of a split over the company’s direction after the one-time market darling’s shares plunged in February on the back of a profit warning as its fast-paced local expansion strategy came unstuck and analysts slashed forecasts. Bain Capital has now teamed with BWX chief executive John Humble and finance director Aaron Finlay to lob an unsolicited, preliminary, non-binding, indicative and conditional proposal for the company. Bain and the two executives, who control of a 10.38 per cent slice of the company, are offering investors a choice between $6.60 cash per share and a scrip alternative where they would receive 75 per cent in shares in a new unlisted vehicle and 25 per cent in cash.
Healthscope Ltd (HSO):
Healthscope has refused to open its books to two groups seeking to buy the company, and said it would consider boosting returns for shareholders through a potential sale and leaseback of its Australian private hospitals. Healthscope (HSO) said it wouldn’t allow Brookfield Asset Management or a consortium led by BGH Capital and AustralianSuper, one of the country’s largest pension-savings funds, to carry out due diligence after each made indicative bids worth more than $4 billion. It said the proposals undervalued Healthscope, given the group’s improving performance.“The board is committed to maximizing value for shareholders and has decided to commence a strategic review of Healthscope’s substantial freehold property portfolio,” Healthscope said. It owns 29 freehold properties that management expect “to have a market value well in excess of their current book value of approximately $1.3 billion.”
IOOF Holdings Limited (IFL):
Wealth manager IOOF may be forced to face a long-awaited shareholder class action after the Federal Court ruled the company must disclose documents relevant to an alleged frontrunning scandal that sparked a sharp tumble in the group’s share price. The court order requires the $3 billion ASX-listed IOOF to disclose documents related to allegations of misconduct. The disclosure, to ACA Lawyers and litigation funders Investor Claim Partner and Litigation Lending Services, will allow the groups to decide if they want to launch a class-action suit. IOOF’s share price posted its largest ever one-day fall in 2015, after a whistleblower blew the lid on misconduct within the group’s research division, going as far back as 2009. The 13 per cent fall in the stock caused the Australian Securities & Investments Commission to launch a probe into allegations that head of research Peter Hilton, who has since stepped down, was frontrunning trades ahead of releasing research to clients.
James Hardie Industries plc (JHX):
Building materials supplier James Hardie has posted a plunge in full-year net profit, in part due to a higher number of asbestos compensation claims. The company said net profit fell 47 per cent to $US146.1 million, driven by a 5 per cent increase in claims for asbestosrelated disease, acquisition costs and debt. The larger asbestos liabilities, as well as the loss on early debt extinguishment and acquisition costs, triggered a net operating loss for the fourth quarter of $US57.6m, compared to a profit of $US44.5m in the fourth quarter last year. This was partially offset by an income tax benefit and the favourable underlying performance of the operating business units, the company said. For the full year to March 31, net operating profit fell 47 per cent to $US146.1m, down from $US276.5m last year. On an adjusted basis, net operating profit for the year hiked up 17 per cent to $US291.3m for the full year.
National Australia Bank Ltd (NAB):
National Australia Bank has foreshadowed a revision of executive pay practices that will include incentives linked to treatment of customers as part of a sweeping overhaul of its culture spurred by the royal commission. NAB chairman Ken Henry said the new policy would be simpler to understand, reward long-term performance — including by deferring bonuses — and “incentivise the right behaviours, especially with respect to the treatment of customers”. The new approach, which will apply from next year, comes as the bank aims to implement all of the recommendations of the Sedgwick Review of bank pay by 2020. NAB has already replaced product-based incentives for 700 retail branch managers, assistant branch managers, and sales team leaders in consumer call centres with a group incentive based on a “balanced scorecard and NAB performance”.
Santos Ltd (STO):
Private US firm Harbour Energy has declared its latest offer of $14.5 billion for Santos is “best and final”, leaving it to the Adelaide icon’s board to decide whether to recommend to shareholders what would be Australia’s biggest resources takeover. Harbour yesterday sweetened a previously disclosed $US4.98 per share bid to $US5.21 ($6.95 at current exchange rates) after extensive discussions with the Santos board that had made it clear recent oil price gains and company performance required a higher bid. Santos shares rose 11c, or 1.8 per cent, to $6.36 on the new offer, with the gap to the $6.95 offer price illustrating uncertainty around whether the deal will be completed even if the board recommends it. The conditional bid has also come with some extra complication and uncertainty in that it will require Santos to increase its oil price hedging to get it through. But shareholders indicated they did not believe the hedging requirements were a big hurdle to a deal that has been in the works since August and on which Harbour, headed by former Shell executive Linda Cook and managed by EIG Global Energy Partners, has recently conducted five weeks of due diligence.
Telstra Corporation Ltd (TLS):
Telstra cannot explain why millions of customers were left stranded without a mobile service after its 4G services were knocked out of action and its back-up system again failed to handle the impact of a large -service disruption. The disruption yesterday left customers unable to use data services and make calls, and prompted NSW police to warn that it could prevent people from reaching emergency services. Telstra was also unable to say how many customers were affected by the problem. It was the third major outage in three weeks for Telstra, which charges a premium for its mobile services, and comes as it scrambles to convince investors that it can maintain its position as the market leader. Telstra’s share price is near an eight-year low, with more than $4 billion wiped off its books over the course of a week. Investors were spooked last week after Telstra told the market its full-year earnings had been further undercut by -increased competition in the mobile market and the ongoing impact of the National Broadband Network on its earnings. Since taking over as chief executive in May 2015, Andrew Penn has seen more than $45bn scorched under his watch.
(Source: AIMS)
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