Commonwealth Bank of Australia (CBA):
ASIC has accepted an enforceable undertaking from Commonwealth Bank that will see the bank pay $25 million over attempts to rig the Bank Bill Swap Rate. It comes after the Federal Court in Melbourne imposed pecuniary penalties totalling $5m on CBA for attempting to engage in unconscionable conduct in May. As part of the deal, CBA will also pay $15m in community benefits and $5m to ASIC’s legal and investigation costs. The corporate regulator brought legal action against the bank in Federal Court in January over claims it rigged benchmark interest rate and the bank admitted to attempting to seek to affect where BBSW set on five occasions in 2012. It also admitted that its traders were adequately trained and will now appoint an independent expert to assess changes need to its policies and procedures. It comes as CBA pledged to improve its financial advice after it signed an enforceable undertaking with ASIC in April, over its failure to provide annual reviews to about 31,500 customers.
Dacian Gold Ltd (DCN):
ASX-listed gold company Dacian Gold is seeking to raise up to $45 million in fresh equity. The company's shares went into a trading halt on Wednesday morning as its three brokers started seeking investor support. Dacian was seeking to raise up to $40 million in an institutional placement, which would be followed by a share purchase plan to existing investors. New shares were being offered at $2.70 each, which was a 10.3 per cent discount to the last close according to terms sent to fund managers. Funds raised were to accelerate exploration at its Westralia project, seeking to increase production and extend its mine life. Argonaut, Canaccord Genuity and RBC Capital Markets were named as joint lead managers. Dacian is a WA-based gold miner with a $620 million market capitalisation prior to Wednesday's raising.
Mineral Deposits Limited (MDL):
French miner Eramet has succeeded in capturing Mineral Deposits Limited (MDL), with its bid winning support from the board of the takeover target just hours before Eramet's ownership exceeded 50 per cent. Ten weeks after launching its hostile bid, Eramet said on Wednesday that it had taken control of 52.55 per cent of MDL, which is Eramet's joint venture partner in a mineral sands business that has assets in Senegal and Norway. Eramet originally offered $1.46 for each MDL share, but had to raise its offer to $1.75 per share to win acceptance from a majority of shareholders. Wednesday's confirmation of control came just hours after the MDL board changed its recommendation over the $1.75 per share offer price; the board had initially rejected the improved offer because it was conditional and well below the $2.04 to $2.52 range that had been put forward as fair value by an "independent" expert hired by MDL. But the board changed its stance on Tuesday evening after conceding that Eramet would soon take majority control and after accepting that no rival bids for the company were going to emerge. "MDL directors, on balance, now unanimously recommend that shareholders accept Eramet's offer. Each MDL director intends to accept Eramet's offer in respect of their own shareholding," said the board on Tuesday evening.
Platinum Asset Management Limited (PTM):
Platinum Asset Management’s funds under management slipped in June, as its funds underperformed the market, with its flagship Platinum International Fund returning negative 1.8 per cent in the month. Its funds under management were also reduced by the distribution paid out to investors for the year end. Prior to the distribution, funds under management fell to $27.21 billion in the month, down from $27.75bn in May. Taking into account the $1.5bn distribution paid out to investors, funds under management declined to $25.7bn. Legendary investor Kerr Neilson’s announcement in February that he would step down from the CEO role triggered fears of mass outflows from the fund — a scenario that hasn’t eventuated, with funds under management remaining fairly stable in recent months. But the fund’s poor performance and stretched valuation saw brokerage Credit Suisse last week downgrade it to underperform and slash its target price to $5.25 from $5.50. “Platinum is trading on 18 times 12-month forward earnings which puts it at a circa 30 per cent premium to peers and makes it the most expensive manager in our coverage,” analyst James Cordukes said.
Retail Food Group Limited (RFG):
Retail Food Group is believed to be working with investment bank UBS as speculation mounts that a break-up of the troubled food franchising group could be on the cards. The investment bank and the company behind brands such as Donut King, Michel’s Patisserie, Brumby’s Bakery and Gloria Jean’s did not comment on the speculation yesterday, but observers believe it makes sense for the Queensland-based company to secure a seasoned adviser to help the group sell assets, drive down debt and return to profitability. Accounting firm Deloitte has been helping out the business, but some say UBS could be launching a sales process on behalf of its food distribution business Hudson Pacific. The business was purchased by RFG in 2016 for $88 million and many believe it does not remain the best fit for the business and had not been particularly well integrated. It is also considered the easiest part of the business to sell in order to raise capital.
Telstra Corporation Ltd (TLS):
Telstra is on the lookout for a new networks guru to lead it into the 5G mobile era as the incumbent, Mike Wright, is set to leave the company in September. Mr Wright, who joined the telco in the early 80s, was the chief architect of Telstra’s 4G mobile network, an asset that remains at the heart of its business. Mr Wright is leaving the telco just as the 5G mobile race in Australia gets ready to start in earnest. With the first phase of the 5G rollout heavily reliant on the strengths of the existing 4G networks, Telstra is hoping that its ongoing investment in its 4G network will help it maintain its thinning edge over rivals Optus, Vodafone Australia and TPG Telecom. Telstra has decided to redefining its mobile pitch to the market as part of its recently announced “Telstra 2022” strategy, which will also see the telco shed up to 9500 jobs over the next three years. A Telstra spokesman told The Australian that Mr Wright’s departure was not connected to the announced job cuts or the recent spate of network outages. “This is a decision that Mike has made after nearly four decades of service with Telstra,” he said. The telco has also played down talk that Mr Wright’s sudden departure could destabilise its 5G deployment plans. “This will have no impact, we have a breadth of network engineering excellence to draw on that will ensure we deliver our Networks for the Future program and lead the market on 5G,” the spokesman said.
Transurban Group (TCL):
Transurban chief Scott Charlton could be forgiven for feeling slightly under siege right now. An already hectic July went into overdrive on Tuesday, when the company was forced to hose down suggestions that it was pulling in almost $150 million in fees charged to motorists using its toll roads around the country. Transurban quickly responded to the claims, based on documents leaked to The Age newspaper, by declaring it makes no profits on these fees. But the timing of the leak – and the familiar, if misguided, cries of "monopoly" that it stirred up – certainly won't make Charlton's month any easier. Next Tuesday, the Queensland Parliament will hold a public briefing as part of its inquiry into the operation of toll roads in the state – a probe triggered by complaints about high tolls and poor usage levels. No doubt the Victorian fee issue will be picked up in that forum, too. But the biggest date in Charlton's immediate diary is surely July 19, when the Australian Competition and Consumer Commission will announce whether Transurban can bid as part of a consortium to build and operate the WestConnex toll road in Sydney.
Viva Energy:
Viva Energy has been priced at $2.50 per share for its initial public offering. The price is at the bottom of the share price range and it will now list as a company on Friday worth about $4.86 billion. The bookbuild for the float concludes today and the size of the raising is still to be concluded. Yesterday, bids were in for about $2.9bn at $2.50 per share and with most bids in around that price, the vendor opted to set the price around that level. The share price range for the book build was between $2.50 and $2.65 per share. Earlier expectations had been that the group would price around $2.50 per share, with cornerstone investors committing to back the deal around that price, offering up about $1.2bn. The price for the deal equates to between 6.5 times Viva’s underlying earnings before interest, tax, depreciation and amortisation. Working on the IPO as joint lead managers are UBS, Deutsche Bank and Bank of America Merrill Lynch.
(Source: AIMS)
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