Mineral Resources has cleared the way for Atlas Iron to seek merger talks with Fortescue Metals Group by liberating the lossmaking junior from contractual arrangements that limited it from seeking rival suitors. But MinRes signalled that its generosity in the contest for control of Atlas and its valuable port assets would only extend so far, with the company pointedly highlighting that successive governments in Western Australia have wanted Atlas' port capacity to be quarantined for junior miners rather than big miners like Fortescue and BHP. Atlas will be able to discuss a control transaction with Fortescue until June 22, after MinRes gave the junior leave from "no talk" and "no due diligence" clauses in the deal Atlas struck with MinRes in April. Atlas and MinRes had been working toward a friendly combination of their businesses, with Atlas shareholders set to vote on the proposal next month, but those plans were shot down on Thursday when Fortescue emerged with 19.9 per cent of Atlas and vowed to block the merger with MinRes. Fortescue is yet to clarify whether it wants to acquire Atlas for itself, or whether it is just seeking leverage over MinRes in a bid to influence how it develops Atlas' low-grade iron ore deposits and contracted port capacity.
Macquarie Group Ltd (MQG):
Macquarie Group will be forced to defend the structure of employment contracts in its private wealth unit for the second time in as many years, after a group of 15 former advisers hit the bank with legal action. A statement of claim, obtained by AFR Weekend and lodged with the Federal Circuit Court of Australia this week, alleges a string of breaches of the Fair Work Act by Macquarie's banking division. The potential breaches relate to claims of underpaying advisers' entitlements spanning their annual leave, public holidays, leave loading and compassionate and carer's leave. The group of former private client advisers claims Macquarie failed to comply with National Employment Standards and the modern award covering the banking, finance and insurance industry. The John Wardman-led group is seeking to be reimbursed for total underpayments of $2.6 million plus interest, penalties and legal costs and also wants Macquarie to be issued with pecuniary fines.
Mineral Deposits Limited (MDL):
Eramet's path towards control of Mineral Deposits Limited (MDL) has become more complicated, with a newly formed alliance of shareholders hinting the French miner will need to consult with the target's board of directors and offer closer to $2 per share to win support.Eramet bypassed the MDL board and offered $1.46 for each MDL share in April but found that few shareholders were willing to accept at that price, with the stock trading above $1.70 per share for the past three weeks. As expectations grew last week that Eramet may soon improve its offer, two large shareholders collectively controlling about 12 per cent of MDL shares announced they would "act in concert" with regard to the takeover bid. The alliance between Farjoy Pty Ltd and Dr Harry Hirschowitz could prove strategically important if Eramet is successful in taking control of the MDL, as the alliance controls enough shares to prevent the French miner from reaching the 90 per cent threshold for compulsory acquisition of remaining shares.
Qantas Airways Limited (QAN):
Aerospace giant Boeing says its "mid-market" aircraft could revolutionise Australian airlines' operations by allowing them to fly more passengers on congested domestic routes while opening up new paths to Asia. Qantas has already flagged it is interested in Boeing's "New Midsize Airplane" (NMA), referred to by some in the industry as the 797, and the plane maker is gauging the needs of airlines around the world while it decides whether to put it into production. Darren Hulst, a senior managing director of sales at Boeing's commercial aeroplane division, said the NMA was particularly compelling for Australian airlines who are struggling with capacity constraints between Sydney, Melbourne and Brisbane.
Rio Tinto Limited (RIO):
Rio Tinto has deepened its relationship with Chinese state-owned miner Minmetals by agreeing to pump $US5.5 million ($7.2 million) into an exploration joint venture that will scour China for valuable deposits. Friday's deal formalises and builds upon a co-operation pact that was struck between the two companies in May 2017, and comes after Rio chief executive Jean-Sebastien Jacques said last month that miners increasingly needed to work together on projects. While initially focused on Chinese deposits, the companies said the joint venture would eventually turn its focus to exploring other parts of the world. "The formalisation of the exploration joint venture is an important milestone in our growing partnership with China and Minmetals, who is an increasingly important player in the global mining industry. Our complementary strengths in exploration put us in the best possible position to find metals and minerals essential to human progress," said Rio chief executive Jean-Sebastien Jacques. Minmetals is the major shareholder in Melbourne based MMG Limited, which operates the Dugald River zinc mine in Queensland and trades on the ASX via depositary instruments.
Sino Gas & Energy Holdings Limited (SHE):
Sino Gas & Energy's suitor Lone Star made three earlier takeover proposals at lower prices before securing the backing of the target's board for its $530 million deal, giving grounds for what chief executive Glenn Corrie says is growing support for the offer from investors. The US private equity giant first made a takeover proposal to Sino, Australia's only indigenous gas producer in China, in December, at 17¢ a share. That followed an initial meeting with the board in September last year, according to sources. That was increased to 21¢, then to 23¢ in April, before due diligence in the data room from which the agreed 25¢ a share offer emerged. The previous approaches and the process leading up to the deal announced on May 31 were not revealed by Sino Gas or Lone Star, partly explaining the criticism voiced by some shareholders when the deal was announced that the price was too cheap. Significant shareholders Fidelity, Commonwealth Bank of Australia and IOOF are all said to be in favour of the 25¢ per share cash offer, despite the price appearing a relatively small premium to recent trading. Between them, the three represent about 21 per cent of the register.
Virgin Australia Holdings Ltd (VAH):
Virgin Australia's group chief executive and managing director, John Borghetti, will leave the airline by the end of next year. The industry veteran had told Virgin's board he would not renew his contract after January 1, 2020, the company announced on Tuesday morning. "The board will now commence a global search for a successor while John will remain focused on leading the group," chairman Elizabeth Bryan said in a statement. “I would like to acknowledge John’s enormous contribution to the Virgin Australia Group to date and thank him for his continued dedication." Mr Borghetti signaled his desire to leave the group early to allow time for the group to recruit a new CEO and allow for an "appropriate transition", the company said. Mr Borghetti joined Virgin as CEO in 2010 following a 38-year career at Qantas, during which he rose to the ranks of its senior executives, but lost out to Alan Joyce for the position of Qantas CEO.
Westpac Banking Corp (WBC):
Westpac Banking Corp has ended its referral relationship with Prospa, a sign major banks are preparing to ramp up unsecured small business lending to try to regain some of the market that has been surrendered to start-ups. After Prospa indefinitely postponed its ASX listing last week amid questions on whether its loan contracts breached new laws, the online business lender faces more intense competition from big banks who are developing new products to lend more to small business without requiring residential property to be pledged as security. "We did not continue our contract with Prospa because we are working on developing our own products that will satisfy more of our customers' needs," a Westpac spokesperson told The Australian Financial Review.