Takeover target Vocus has again opened its books to a suitor, with AGL Energy lobbing a $3.1 billion bid for the telco. After approaching Vocus’s management with a $4.80-a-share offer in April, AGL sweetened its latest offer to $4.85 a share to carry out the due diligence exclusively over four weeks. Vocus shares spiked on the news, rising 13 per cent to $4.35 before closing yesterday at $4.16. AGL’s shares, however, closed more than 7 per cent weaker at $19.42 on a day when the S&P/ ASX 200 hit its highest level since November 2007. Investors were reacting to both the rebooted deal and a potential $100 million hit to AGL’s fiscal 2020 earnings after it said on Friday that one of the four coal units at its Loy Yang coal plant would be offline until January. AGL’s decision to return to the fray was widely expected after Vocus’s previous suitor, Swedish private equity player EQT, decided to end its pursuit last week. Having offered $5.25 a share for Vocus, EQT opted against launching a fullblooded chase, giving AGL the chance to come back to the table.
Amcor Limited (AMC):
A new-look Amcor will trade for its first day on the market today after completing its $9.5 billion mega-merger with Bemis. The acquisition creates a global leader in consumer packaging and will broadens Amcor’s capabilities and footprint. Combined, the company will trade as Amcor on the NYSE as well as the ASX. Amcor chief executive Ron Delia described the acquisition as “a significant milestone as two strong companies with histories each dating back over 150 years look forward to one great future”.
Australian Mines Limited (AUZ):
Shares in Australian Mines are down 15.4 per cent to 2.2 cents after it announced a share purchase plan to raise up to $10 million this morning. An initial $5 million will be offered with the potential to raise a further $5 million from from sophisticated investors. At current prices this will add about 455 million shares to the 3 billion shares already on issue. R
Blue Sky Alternative Investments Limited (BLA):
A couple of announcements from Blue Sky Alternative Investments, which is currently under administration with receivers appointed. It has come to a confidential resolution in legal proceedings in which it tried to stop former employees of its Blue Sky Water Partners business from using or accessing a slew of spreadsheets detailing company secrets including pricing, modelling and investment deals. Read the background story from Sarah Danckert here. And two directors resigned yesterday - John McDonald, appointed 10 December last year, and chairman Andrew Day, who was appointed in November 2018. Neither owned any shares, according to disclosures made this morning. Director Robert Kaye left last week. He didn't own any shares either. Chief executive Joel Cann left the company on Friday as the role of chief executive is "no longer required" following a strategic assessment.
Boart Longyear Ltd (BLY):
Drilling services company Boart Longyear today announced directors and management have participated in an overnight placement after major shareholder Ares Management sold 2.1 billion shares, which represents nearly 8 per cent of shares on offer. Shares are trading at $0.005 today. Jeff Olsen, Boart Longyear's chief executive, told the market today the purchase of shares by members of the board of directors and management is "an expression of confidence in the Company and its future operations". Boart Longyear was once a market darling when it floated in 2007 and raised $2.35 billion. But it got caught up in the global financial crisis when mining companies were not sure whether or not to continue mining in 2009. At one point 15 per cent of Boart Longyear's rigs were idle. It now has a market capitalisation of $131.5 million and a staggering 26.3 billion shares on issue. The stock reached a high of $20.57 in October 2007, but dropped below $5 in late 2008 and has been below 5 cents since 2014 and below 1 cent since August 2018.
Emeco Holdings Limited (EHL):
Emeco Holdings has forecast a 40 per cent boost to its full year earnings and tipped positive market conditions to continue into the next year. In an update to the market this morning, the renter of heavy equipment said it was reaping the benefits of an increase in total material movement amid tight equipment supply, especially in the eastern region. The company expects full year operating earnings in the range of $211 million to $213 million, up almost 40 per cent from the previous year. “Growth capex from recent purchase of high-utilisation assets is forecast to come in below the budgeted $90m expenditure, and on target to generate $25m EBITDA in FY20,” it said. Stock in the company is currently trading near 18 month lows with shares de-rating by 40 per cent since February.
Evans Dixon Ltd (ED1):
Evans Dixon's flagship US property fund will slash dividend payouts to unitholders by 80 per cent and begin to sell off assets to repay debt, the Financial Review's Carrie LaFrenz reports. On Wednesday the group said the dividend for unitholders would be slashed from 5¢ to 1¢ with funds used to repay ASX-listed, unsecured debt holdings, known as URF Notes II and URF Notes III. At the time a company spokeswoman noted the high divided yield was a top selling point to retirees looking for some income, and highlighted that 5¢ distribution for the period ended December 2018 was "the fourteenth straight six-monthly distribution of 5¢ per unit".
Legend Corporation Limited (LGD):
Electrical parts and communications company Legend Corporationsays it is expecting post-tax profit of $7.3 million this financial year compared to $6 million in 2017-18. Earnings before interest tax depreciation and amortisation are expected to be between $15.4 million and $15.7 million, about $3 million more than last year. "Legend continues to enjoy solid growth in our organic business. PCWI and Gas & Plumbing performance is particularly pleasing. Unfortunately, the Commsforce business, a unit of the Celemetrix group, has made very little contribution to earnings due to lower than expected sales and deferrals of telco purchase programs," chief executive Brad Dowe tells the market this morning.
Macmahon Holdings Limited (MAH):
Mining services company Macmahon Holdings is up 16.2 per cent to 19.75 cents after confirming guidance this morning of underlying earnings before interest and tax of between $70 million and $80 million. It has net tangible assets of 19.2 cents per share and net debt of up to $45 million. It also expects growth in 2019-20 "based on the company's current workload and does not depend on winning any significant new work". Winning any of the $7 billion worth of work it is tendering for would represent further growth. However, it does note that its "life of mine" contract for Newcrest's Telfer project is starting to cost it money due to changes in the mine plan and works programme. Macmahon is negotiating a new contract with Newcrest, but if it cannot reach a new deal by the next reporting date will set aside between $25 million and $35 million for costs exceeding the contract value. Also, Macmahon performs open cut mining at Dacian Gold's Mt Morgans, which it advised in 5 June would produce less gold than expected due to problems with underground mining. Macmahon notes it is not involved in underground operations and Dacian is up to date on payments.
Wesfarmers Ltd (WES):
Wesfarmers will spend $230 million buying online shopping platform Catch Group Holdings, it has just told the market. Catch Group will become an independent business unit managed by Ian Bailey, managing director of Kmart Group, and will accelerate "onmi-channel initiatives" across Kmart and Target. "This acquisition represents and opportunity to accelerate Wesfarmers and Kmart Group's digital and e-commerce capabilities whilst continuing to invest in the unique customer and supplier proposition provided by Catch Group," managing director Rob Scott told the market this morning.
(Source: AIMS)
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