Commonwealth Bank of Australia (CBA):
The Commonwealth Bank wasted over $50 billion of shareholder capital as a result of the acquisition of Colonial, fund manager Merlon Capital Partners has claimed as it called for investors to have a greater say in large transactions. The fund manager, which oversees $1.4 billion of assets and has previously taken aim at AMP's decision to divest its life insurance assets, said the decision in 2000 by the Commonwealth Bank to acquire financial services group Colonial for $11 billion had proved costly over the near two-decade-long term of the investment. In a research note, Merlon tallied up the total “value destruction” at $53 billion. This it said was based on an $83 billion forgone gain if the capital and cash used to acquire Colonial was deployed by investors into the other major banks. The fund then subtracted $23 billion of accrued profits generated from the Colonial business, and the current $7 billion value of the acquired assets, to reach the $53 billion figure.
Crown Resorts Ltd (CWN):
Australia's biggest casinos company Crown Resorts has gone into a trading halt on the ASX on Tuesday morning amid talk it has received a takeover approach from Las Vegas giant Wynn Resorts. The ASX advised that trading in Crown will be ''temporarily paused pending a further announcement''. Crown Resorts has confirmed it is in talks with Wynn Resorts regarding a confidential takeover proposal involving both cash and scrip. The proposal contemplates the acquisition of Crown by Wynn via a scheme of agreement with 50 per cent given in cash and 50pc in Wynn shares - an implied value of $14.75 and what is a 26 per cent premium to Crown’s last closing price. “The proposal is subject to a number of conditions including due diligence, Wynn obtaining all necessary regulatory approvals and a recommendation by the Crown Board. It is stated to be preliminary, confidential, non-binding and indicative,” Crown said, noting it had not yet considered the proposal. Goldman Sachs and UBS are acting as financial advisers and Ashurst as legal adviser to Crown. It comes after The Australian Financial Review's Street Talk column revealed that an approach to Crown Resorts had occurred.
Oil Search Limited (OSH):
Oil Search has signed a gas agreement with Papua New Guinea’s government, a key milestone to kickstart a planned $US13 billion ($18.4bn) expansion that’s set to double LNG volumes from the South Pacific nation. The fiscal framework underpinning Papua LNG — a joint venture between energy giants Total, ExxonMobil and Oil Search - will include a deferred payment mechanism for the PNG government to lower the financial burden of taking up its 22.5 per cent interest in the project. It’s understood state-backed oil company Kumul Petroleum — which is being advised by Lazard — will be required to tip in about $US1.4 billion as part of the expansion project. Oil Search will hold a 17.7 per cent stake with Total owning 31.1 per cent of the venture and Exxon the 28.7 per cent remainder. The gas pact will also include a domestic market obligation to develop local industry and provide sufficient local power generation. The three energy companies will move into a front-end engineering and design phase with a final investment decision due in 2020 and first LNG by 2024.
Rio Tinto Limited (RIO):
Rio Tinto agreed to invest $US343 million ($481 million) in expanding the Richards Bay Mining operation in South Africa. A total of $US463 million will be spent on the construction of the Zulti South project as part of a plan to sustain Richards Bay's current capacity and extend mine life. Richards Bay currently operates four mines in the Zulti North lease area, a mineral separation plant and smelting facility. The Zulti North orebody grade is declining, hence the Zulti South mine is required to maintain the output of high-margin zircon and rutile, and provide sufficient ore to support TiO2 sales, Rio said in a statement. The first phase of the Zulti South mine will underpin Richards Bay’s supply of zircon and ilmenite over the life of mine.
Telstra Corporation Ltd (TLS):
Telstra says Vicki Brady, former head of consumer and small business, will take over as the telco’s chief financial officer and head of strategy. She replaces Robyn Denholm, who is leaving to be chair of Elon Musk’s Tesla. CEO Andy Penn says Ms Brady will start in her new role on July 1. Acting group executive Michael Ackland will be permanently appointed to lead the consumer and small business function.
Wesfarmers Ltd (WES):
Wesfarmers has hit back at criticism of its engagement with the Malaysian government on the future of $1.5 billion takeover target Lynas Corporation, which went into a trading halt when the market opened on Tuesday. Rob Scott-led Wesfarmers said it disappointed with the “mis-characterisation” of its discussions with Malaysian officials on the rare earths miner and processor and rejected any inference that these were inappropriate or intended to interfere with government processes. The fighting words came after Lynas investors accused Wesfarmers of meddling in Malaysia and said its actions raised governance issues for the $38 billion conglomerate. On Friday, Malaysia prime minister Mahatir Mohamad indicated that Lynas may continue to operate if raw materials mined in Western Australia were shipped to his country after first stage processing to remove radioactivity.
(Source: AIMS)
The Commonwealth Bank wasted over $50 billion of shareholder capital as a result of the acquisition of Colonial, fund manager Merlon Capital Partners has claimed as it called for investors to have a greater say in large transactions. The fund manager, which oversees $1.4 billion of assets and has previously taken aim at AMP's decision to divest its life insurance assets, said the decision in 2000 by the Commonwealth Bank to acquire financial services group Colonial for $11 billion had proved costly over the near two-decade-long term of the investment. In a research note, Merlon tallied up the total “value destruction” at $53 billion. This it said was based on an $83 billion forgone gain if the capital and cash used to acquire Colonial was deployed by investors into the other major banks. The fund then subtracted $23 billion of accrued profits generated from the Colonial business, and the current $7 billion value of the acquired assets, to reach the $53 billion figure.
Crown Resorts Ltd (CWN):
Australia's biggest casinos company Crown Resorts has gone into a trading halt on the ASX on Tuesday morning amid talk it has received a takeover approach from Las Vegas giant Wynn Resorts. The ASX advised that trading in Crown will be ''temporarily paused pending a further announcement''. Crown Resorts has confirmed it is in talks with Wynn Resorts regarding a confidential takeover proposal involving both cash and scrip. The proposal contemplates the acquisition of Crown by Wynn via a scheme of agreement with 50 per cent given in cash and 50pc in Wynn shares - an implied value of $14.75 and what is a 26 per cent premium to Crown’s last closing price. “The proposal is subject to a number of conditions including due diligence, Wynn obtaining all necessary regulatory approvals and a recommendation by the Crown Board. It is stated to be preliminary, confidential, non-binding and indicative,” Crown said, noting it had not yet considered the proposal. Goldman Sachs and UBS are acting as financial advisers and Ashurst as legal adviser to Crown. It comes after The Australian Financial Review's Street Talk column revealed that an approach to Crown Resorts had occurred.
Oil Search Limited (OSH):
Oil Search has signed a gas agreement with Papua New Guinea’s government, a key milestone to kickstart a planned $US13 billion ($18.4bn) expansion that’s set to double LNG volumes from the South Pacific nation. The fiscal framework underpinning Papua LNG — a joint venture between energy giants Total, ExxonMobil and Oil Search - will include a deferred payment mechanism for the PNG government to lower the financial burden of taking up its 22.5 per cent interest in the project. It’s understood state-backed oil company Kumul Petroleum — which is being advised by Lazard — will be required to tip in about $US1.4 billion as part of the expansion project. Oil Search will hold a 17.7 per cent stake with Total owning 31.1 per cent of the venture and Exxon the 28.7 per cent remainder. The gas pact will also include a domestic market obligation to develop local industry and provide sufficient local power generation. The three energy companies will move into a front-end engineering and design phase with a final investment decision due in 2020 and first LNG by 2024.
Rio Tinto Limited (RIO):
Rio Tinto agreed to invest $US343 million ($481 million) in expanding the Richards Bay Mining operation in South Africa. A total of $US463 million will be spent on the construction of the Zulti South project as part of a plan to sustain Richards Bay's current capacity and extend mine life. Richards Bay currently operates four mines in the Zulti North lease area, a mineral separation plant and smelting facility. The Zulti North orebody grade is declining, hence the Zulti South mine is required to maintain the output of high-margin zircon and rutile, and provide sufficient ore to support TiO2 sales, Rio said in a statement. The first phase of the Zulti South mine will underpin Richards Bay’s supply of zircon and ilmenite over the life of mine.
Telstra Corporation Ltd (TLS):
Telstra says Vicki Brady, former head of consumer and small business, will take over as the telco’s chief financial officer and head of strategy. She replaces Robyn Denholm, who is leaving to be chair of Elon Musk’s Tesla. CEO Andy Penn says Ms Brady will start in her new role on July 1. Acting group executive Michael Ackland will be permanently appointed to lead the consumer and small business function.
Wesfarmers Ltd (WES):
Wesfarmers has hit back at criticism of its engagement with the Malaysian government on the future of $1.5 billion takeover target Lynas Corporation, which went into a trading halt when the market opened on Tuesday. Rob Scott-led Wesfarmers said it disappointed with the “mis-characterisation” of its discussions with Malaysian officials on the rare earths miner and processor and rejected any inference that these were inappropriate or intended to interfere with government processes. The fighting words came after Lynas investors accused Wesfarmers of meddling in Malaysia and said its actions raised governance issues for the $38 billion conglomerate. On Friday, Malaysia prime minister Mahatir Mohamad indicated that Lynas may continue to operate if raw materials mined in Western Australia were shipped to his country after first stage processing to remove radioactivity.
(Source: AIMS)
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