AMP staff responded to the poor performance of its super funds by recommending its own trustees cut return targets rather than make better investments, company documents made available by the banking royal commission reveal. Board minutes and other internal AMP documents released yesterday also reveal that AMP has until recently charged customers of its flagship “low-cost” super fund option fees totalling a whopping 1.21 per cent of their balance every year, the highest in the -market. And they show that AMP’s trustee board was last year concerned its offerings were being outgunned by those offered by the not-for-profit industry fund sector — but that the board was worried changing its investments to be more competitive would have “implications” for the business model of its sister company, investment manager AMP Capital.
Centuria Capital Ltd (CNI):
Centuria Capital is bulking up its office empire with its listed Centuria Metropolitan REIT teaming with billionaire Paul Lederer to acquire four office buildings from US-based Hines Global REIT, Inc, for $645 million. The listed trust will buy three of the assets — 818 Bourke Street, Melbourne, 825 Ann Street and 100 Brookes Street, Fortitude Valley, Brisbane — outright and a 25 per cent interest in 465 Victoria Avenue, Chatswood, for a total of $501 million. The private Lederer Group will acquire a 75 per cent interest in 465 Victoria Avenue, Chatswood for about $125 million via a co-ownership agreement. UBS and Moelis are joint lead managers on the $276m raising to back the purchase. It comprises a $197m one for three accelerated non-renounceable pro rata entitlement offer, a retail entitlement offer and a $79m placement. The offer price of $2.43 per security was a 4.7 per cent discount to last close of $2.55.
Cochlear Ltd (COH):
Australian biotech giant Coch-lear has announced its next wave of innovation, with news of a study on a fully implantable Cochlear device that will revolutionise its globally recognised product. The company (COH) has informed the Australian market about the start of a further clinical feasibility study in its long-term -research and development program. The new technology being studied includes an implanted microphone, an implanted rechargeable battery and an implanted sound processor. “Over the last six years we have had a very intensive R&D program to get us to this point and there is still a lot more needed to get to a commercial device,” Cochlear chief technology officer Jan Janssen said. Stock in the company dropped as much as 7 per cent in trade yesterday - but came back to close at $191.88.
Commonwealth Bank of Australia (CBA):
Class action specialist law firm Slater and Gordon has filed its first superannuation law suit, targeting Commonwealth Bank’s wealth management arm Colonial First State over dismal investment returns for damages reaching up to 100 million. Slater and Gordon said it filed its class action against CBA in the Federal Court on Wednesday morning, alleging the bank shunted the savings of its members into uncompetitive funds controlled by the parent bank. This mean Colonial First State members could have been receiving returns as low as 1.25 per cent — below the record-low Reserve Bank cash rate of 1.5 per cent. “We will allege that by dumping members’ super with its parent bank, the CBA, Colonial First State failed to obtain the most competitive interest rate available for its members invested in cash-only investment options and balanced options where there is a cash component,” said Slater and Gordon head of class actions Ben Hardwick.
Greencross Ltd (GXL):
Greencross has today issued a statement in response to reports the vet and pet services company is being courted for takeover. “Greencross confirms that it has received and is engaging with a number of parties regarding credible proposals,” it said in a filing to the market this morning. “The proposals are subject to a number of conditions and are expressed as being non-binding and incomplete.” Shares in the company have jumped 10.39pc in early trade - last at $4.57.
Navitas Ltd (NVT):
Navitas shares have surged more than 20 per cent in early trade after fielding a takeover offer from former chief Rod Jones as part of a consortium with Australian Super and BGH. The stock hit 9-month highs as much as $5.30, up 21.26pc. The proposal, which is for 100 per cent of remaining shares in Navitas by way of scheme of arrangement, would offer shareholders $5.50 cash per share, representing a 26 per cent premium to yesterday’s closing share price. It would also offer Navitas shareholders an alternative such that they could receive consideration of $2.75 cash per Navitas share; and one ordinary share in a newly formed unlisted company RollCo, that will initially own Navitas for every two shares held in Navitas.
Nextdc Ltd (NXT):
After inking its deal to take control of Asia Pacific Data Centres earlier this week, NextDC has today announced a partnership with Alibaba Cloud, the cloud computing arm of Alibaba Group. In a release this morning, NextDC said the partnership makes it a Network Services Partner of Alibaba Cloud, “to deliver efficient, secure and reliable connectivity to help businesses grow in China’s booming e-commerce market, the APAC region and beyond”. Alibaba Cloud is the top public could provider in China, and follows NextDC’s relationships with Microsoft Azure, Google Cloud and Oracle Cloud.
Reece Ltd (REH):
Reece Group may be facing a protest vote at this month's annual meeting after proxy firm CGI Glass Lewis recommended investors vote against the remuneration report because its chief executive's remuneration is too high and the company hasn't provided enough detail about how it awards short-term executive bonuses. The recommendation underscores one of the biggest debates in the market: whether proxy firms have too great an influence on the powerful superannuation funds, which often direct fund managers who manage their members' money to follow proxy advisers' recommendations.
Telstra Corporation Ltd (TLS):
Telstra is bracing for a revolt over executive pay as shareholders and proxy advisers question the wisdom of giving bonuses at a time when the telecommunications giant's share price has crashed and it is showing 8000 staff the door. Powerful proxy advisors CGI Glass Lewis, ISS and Ownership Matters have all recommended voting against Telstra's remuneration report at the telco's annual general meeting next Tuesday. A number of shareholders have also expressed to The Australian Financial Review they will vote against the report. Telstra does have some support on the issue of executive pay. The Australian Shareholders Association has signalled it will vote in favour of Telstra's remuneration report. A "first strike" against Telstra's remuneration report would be the most high-profile slap-down over executive pay since the Commonwealth Bank of Australia saw 49 per cent of votes and proxies cast against its pay scheme in 2016.