APA Group(APA):
Market observers believe a bid by CK Infrastructure for APA is dead in the water, paving the way for a UBS-advised consortium headed by IFM to buy the business, or another possible owner. It is understood that while UBS has been hired by IFM, investment bank Citi also remains close to the action with IFM. Should a consortium form to buy APA, then GIP, advised by Credit Suisse, could also be folded into the mix, potentially with Canada’s OMERS. It came as UBS was heavily buying up stock in APA Group yesterday morning following Treasurer Josh Frydenberg’s statement that the government would block CK Infrastructure’s $13 billion takeover attempt for APA. Of about 12 million shares that were trading early on in the market in APA, trades involving UBS accounted for about half, according to sources. APA shares closed 9.9 per cent lower to $8.57. However, some question whether IFM will come forward with a bid, which is likely to be lower than CKI’s and will probably be rejected by the APA board. The understanding is CKI’s adviser Morgan Stanley has not given up hope, and sources say that it may have also offered up the sale of its Victoria electricity system, which is not integrated into the network, along with West Australian assets. Other options being discussed involve CKI making another play for the company with an Australian partner or providing an undertaking to the government to list part of the company in a year’s time, along with selling more assets.
BHP Billiton Limited (BHP):
BHP chief Andrew Mackenzie has revealed the high-level Chinese access that has made it the miner most outwardly cautious about a US-China trade war, saying President Xi Jinping told him personally it would “punch back” against US sanctions. In August, BHP moved ahead of most global agencies in downgrading its forecasts for 2019 global growth because of US-China trade tensions. Yesterday at the company’s annual general meeting in Adelaide, BHP chairman Ken MacKenzie said the mining giant remained cautious about the potential short-term fallout from global trade tensions, despite not yet feeling a direct impact. “Trade restrictions pose a real threat to economic growth by ¬diverting trade flows, affecting prices and discouraging investment,” Mr MacKenzie said, noting the company’s belief in long-term commodities demand growth was unshaken. Andrew Mackenzie said BHP had good intelligence on China, including directly from Mr Xi.
Lendlease Group(LLC):
Global construction and development company Lendlease has taken a surprise $350 million provision on its struggling engineering and services business. The company’s (LLC) shares sank 15 per cent to $14.80 in early trade after it said it had been slugged by problems on Sydney’s NorthConnex project and would take a provision “in the order of” $350m after tax in this half. Lendlease blamed the “underperformance” mainly on a “further deterioration” in a small number of projects it had previously identified. The company cited lower productivity in the post tunnelling phases of NorthConnex; excessive wet weather, access issues and remedial work arising from defective design on other projects. Lendlease said that measures were being undertaken to mitigate the anticipated losses including negotiations with third parties. “However, at this stage it is unclear as to the extent to which these negotiations will be successful to mitigate the underperformance,” the company said. The ongoing problems have sparked a formal review of the company’s engineering and services business, which some analysts have said should be spun off or sold, because it’s a drag on earnings.
McMillan Shakespeare(MMS):
Investor moves to sell their shares in McMillan Shakespeare yesterday following the announcement of its $912 million bid to merge with Eclipx were being described by some as poorly judged. Shares in McMillan Shakespeare closed 6.4 per cent lower at $15.82 while Eclipx shares soared 16 per cent to $2.67.But market analysts say the deal will be highly accretive for both parties and they believe it will take the value of Eclipx’s shares as high as $3.40 once the synergies of the transaction are factored in.Speculation has been mounting for some time that suitors were circling Eclipx, and the question now is whether SG Fleet or another party will make a rival bid as the salary packaging and fleet leasing industry is ripe for consolidation. Eclipx shareholders will be offered 0.1414 McMillan Shakespeare shares and 46c cash for each Eclipx share held. This implies a total value of $2.85 per Eclipx share based on McMillan Shakespeare’s last closing price of $16.90 on Wednesday. It is a 33.2 per cent premium to Eclipx’s undisturbed share price of $2.14 on August 17. The company says the deal will create a leading Australian and New Zealand salary packaging and fleet management company with about $50m in annual earnings synergies that will be released in three years.
MG Unit Trust (MGC):
Australia’s largest milk processor Murray Goulburn has reached a settlement with the consumer watchdog over representations of the farmgate milk price offered to dairy farmers in financial year 2016. The Australian Competition and Consumer Commission had alleged the co-op had engaged in unconscionable conduct and made false or misleading representations to its Southern Milk region farmers - conduct knowingly involving boss Gary Helou and former CFO Bradley Hingle. “The ACCC will seek a pecuniary penalty against Mr Helou and costs orders against MG and Mr Helou. Under the settlement, MG and Mr Helou will agree to the contraventions and the costs orders against each of them, and Mr Helou will agree to the proposed penalty,” it said in a statement to the market this morning.
National Australia Bank Ltd (NAB):
National Australia Bank will join its major rivals in taking an axe to bonus payments this year, in response to blatant misconduct and poor practices uncovered by the Hayne royal commission. The Australian understands NAB will impose a 30 per cent cut to the shortterm bonus pool for the executive leadership team, including chief executive Andrew Thorburn and his direct reports, to reflect accountability for conduct failures. For other staff, a bank-wide 20 per cent reduction in the available bonus pool is also on the cards for the next financial year.
Navitas Limited (NVT):
Senior management at Navitas have made a presentation to the consortium behind its rejected takeover offer, in the hope of securing an increased proposal. The education group had previously knocked back an offer from the BGH Consortium, including its former chief Rod Jones and Australian Super, but yesterday met with the group to discuss their options. “The presentation provided further detail around the Company’s strategy and plans and sought to provide the BGH Consortium with greater insight into the value inputs that underpin the Board’s assessment of the BGH Consortium’s indicative proposal,” it said in a note to the market. The presentation was delivered under a non-discolure agreement between parties, but Navitas stressed there was no certainty that a deal would surface.
Ramsay Health Care Limited (RHC):
Ramsay Health Care’s French arm is progressing with its takeover of Swedish hospital group Capio after 98.5 per cent of Capio shareholders accepted its offer. In a note to the market today, Ramsay said it would not extend the acceptance period further but inteded to initiate a compulsory buy-out procedure for the remaining Capio shares. Settlement is expected to commence on or around 15 November.
Tower Holdings(TWR):
Cashed-up Sydney developer Terry Agnew has not lost his appetite for property development, lodging plans to redevelop one of his inner city buildings soon after the $60 million sale of his residential mansion and the $70m sale of Great Keppel Island, both of which had been on the market for several years. Mr Agnew’s Tower Holdings has lodged plans to redevelop his Longitude Building at 36 James Craig Road, Rozelle, estimating the redevelopment will cost more than $20m.
(Source: AIMS)
Market observers believe a bid by CK Infrastructure for APA is dead in the water, paving the way for a UBS-advised consortium headed by IFM to buy the business, or another possible owner. It is understood that while UBS has been hired by IFM, investment bank Citi also remains close to the action with IFM. Should a consortium form to buy APA, then GIP, advised by Credit Suisse, could also be folded into the mix, potentially with Canada’s OMERS. It came as UBS was heavily buying up stock in APA Group yesterday morning following Treasurer Josh Frydenberg’s statement that the government would block CK Infrastructure’s $13 billion takeover attempt for APA. Of about 12 million shares that were trading early on in the market in APA, trades involving UBS accounted for about half, according to sources. APA shares closed 9.9 per cent lower to $8.57. However, some question whether IFM will come forward with a bid, which is likely to be lower than CKI’s and will probably be rejected by the APA board. The understanding is CKI’s adviser Morgan Stanley has not given up hope, and sources say that it may have also offered up the sale of its Victoria electricity system, which is not integrated into the network, along with West Australian assets. Other options being discussed involve CKI making another play for the company with an Australian partner or providing an undertaking to the government to list part of the company in a year’s time, along with selling more assets.
BHP Billiton Limited (BHP):
BHP chief Andrew Mackenzie has revealed the high-level Chinese access that has made it the miner most outwardly cautious about a US-China trade war, saying President Xi Jinping told him personally it would “punch back” against US sanctions. In August, BHP moved ahead of most global agencies in downgrading its forecasts for 2019 global growth because of US-China trade tensions. Yesterday at the company’s annual general meeting in Adelaide, BHP chairman Ken MacKenzie said the mining giant remained cautious about the potential short-term fallout from global trade tensions, despite not yet feeling a direct impact. “Trade restrictions pose a real threat to economic growth by ¬diverting trade flows, affecting prices and discouraging investment,” Mr MacKenzie said, noting the company’s belief in long-term commodities demand growth was unshaken. Andrew Mackenzie said BHP had good intelligence on China, including directly from Mr Xi.
Lendlease Group(LLC):
Global construction and development company Lendlease has taken a surprise $350 million provision on its struggling engineering and services business. The company’s (LLC) shares sank 15 per cent to $14.80 in early trade after it said it had been slugged by problems on Sydney’s NorthConnex project and would take a provision “in the order of” $350m after tax in this half. Lendlease blamed the “underperformance” mainly on a “further deterioration” in a small number of projects it had previously identified. The company cited lower productivity in the post tunnelling phases of NorthConnex; excessive wet weather, access issues and remedial work arising from defective design on other projects. Lendlease said that measures were being undertaken to mitigate the anticipated losses including negotiations with third parties. “However, at this stage it is unclear as to the extent to which these negotiations will be successful to mitigate the underperformance,” the company said. The ongoing problems have sparked a formal review of the company’s engineering and services business, which some analysts have said should be spun off or sold, because it’s a drag on earnings.
McMillan Shakespeare(MMS):
Investor moves to sell their shares in McMillan Shakespeare yesterday following the announcement of its $912 million bid to merge with Eclipx were being described by some as poorly judged. Shares in McMillan Shakespeare closed 6.4 per cent lower at $15.82 while Eclipx shares soared 16 per cent to $2.67.But market analysts say the deal will be highly accretive for both parties and they believe it will take the value of Eclipx’s shares as high as $3.40 once the synergies of the transaction are factored in.Speculation has been mounting for some time that suitors were circling Eclipx, and the question now is whether SG Fleet or another party will make a rival bid as the salary packaging and fleet leasing industry is ripe for consolidation. Eclipx shareholders will be offered 0.1414 McMillan Shakespeare shares and 46c cash for each Eclipx share held. This implies a total value of $2.85 per Eclipx share based on McMillan Shakespeare’s last closing price of $16.90 on Wednesday. It is a 33.2 per cent premium to Eclipx’s undisturbed share price of $2.14 on August 17. The company says the deal will create a leading Australian and New Zealand salary packaging and fleet management company with about $50m in annual earnings synergies that will be released in three years.
MG Unit Trust (MGC):
Australia’s largest milk processor Murray Goulburn has reached a settlement with the consumer watchdog over representations of the farmgate milk price offered to dairy farmers in financial year 2016. The Australian Competition and Consumer Commission had alleged the co-op had engaged in unconscionable conduct and made false or misleading representations to its Southern Milk region farmers - conduct knowingly involving boss Gary Helou and former CFO Bradley Hingle. “The ACCC will seek a pecuniary penalty against Mr Helou and costs orders against MG and Mr Helou. Under the settlement, MG and Mr Helou will agree to the contraventions and the costs orders against each of them, and Mr Helou will agree to the proposed penalty,” it said in a statement to the market this morning.
National Australia Bank Ltd (NAB):
National Australia Bank will join its major rivals in taking an axe to bonus payments this year, in response to blatant misconduct and poor practices uncovered by the Hayne royal commission. The Australian understands NAB will impose a 30 per cent cut to the shortterm bonus pool for the executive leadership team, including chief executive Andrew Thorburn and his direct reports, to reflect accountability for conduct failures. For other staff, a bank-wide 20 per cent reduction in the available bonus pool is also on the cards for the next financial year.
Navitas Limited (NVT):
Senior management at Navitas have made a presentation to the consortium behind its rejected takeover offer, in the hope of securing an increased proposal. The education group had previously knocked back an offer from the BGH Consortium, including its former chief Rod Jones and Australian Super, but yesterday met with the group to discuss their options. “The presentation provided further detail around the Company’s strategy and plans and sought to provide the BGH Consortium with greater insight into the value inputs that underpin the Board’s assessment of the BGH Consortium’s indicative proposal,” it said in a note to the market. The presentation was delivered under a non-discolure agreement between parties, but Navitas stressed there was no certainty that a deal would surface.
Ramsay Health Care Limited (RHC):
Ramsay Health Care’s French arm is progressing with its takeover of Swedish hospital group Capio after 98.5 per cent of Capio shareholders accepted its offer. In a note to the market today, Ramsay said it would not extend the acceptance period further but inteded to initiate a compulsory buy-out procedure for the remaining Capio shares. Settlement is expected to commence on or around 15 November.
Tower Holdings(TWR):
Cashed-up Sydney developer Terry Agnew has not lost his appetite for property development, lodging plans to redevelop one of his inner city buildings soon after the $60 million sale of his residential mansion and the $70m sale of Great Keppel Island, both of which had been on the market for several years. Mr Agnew’s Tower Holdings has lodged plans to redevelop his Longitude Building at 36 James Craig Road, Rozelle, estimating the redevelopment will cost more than $20m.
(Source: AIMS)
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