PRESS DIGEST Australian Business News 13 June 07:04, Wednesday, June 13, 2007
(Compiled for Reuters by Media Monitors)
THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
Utilities owner, APA Group, is believed to be working with Macquarie Bank on a A$1 billion bid for the Basslink electrical cable. A successful purchase of the cable, which connects the Australian mainland with Tasmania, would continue APA?s recent run of acquisitions in the energy sector and result in the spin-off of a separate A$1.5 billion entity owning that asset and two others. Teaming up with APA could also revive Macquarie?s activity in the utilities sector, following the failure of its bid for Perth-based energy infrastructure group, Alinta . Page 18.
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Retailer, Woolworths , may consider purchasing Coles Group?s 13 Kmart New Zealand stores after its acquisition of a general merchandise company was barred last week. Woolworths? A$1.9 billion bid for The Warehouse Group was blocked by New Zealand?s Commerce Commission because of competition concerns. The decision is likely to be appealed, a process expected to take up to a year. Retail analysts said the Kmart buy would be a sensible move for Woolworths, and that Coles would probably be willing to look at selling. Page 18.
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Sliding revenue at its Kmart general merchandise stores has forced Coles Group to begin a trial petrol-discount scheme. Under the scheme, shoppers who spend more than A$30 on goods instore will qualify for a A4 cents-a-litre discount voucher for use at one of Coles Express? 600 petrol outlets. Kmart suffered a 3.2 percent drop in comparable store sales in the quarter ended April 29. Page 18.
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Macquarie Media Group (MMG) has extended its influence in the United States (US) newspaper industry with the purchase of two companies in the country?s mid-west. MMG, 20 percent owned by Macquarie Bank, paid A$80.1 million for Superior Publishing and Grove Sun, and has set aside another A$83 million to buy more newspapers over the next three years. Managing director, Alex Harvey, said he hoped 22 to 25 percent of company revenue would be generated in the US within the next few years. Page 47.
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THE AUSTRALIAN (theaustralian.news.com.au)
Australia?s major insurers experienced a tough day on the sharemarket yesterday as investors steadied themselves for news of the cost of Friday?s storms in New South Wales? Hunter Valley. Insurance Australia Group , which has the industry?s largest market share, issued a profit warning and said net costs from its 9000-plus claims could rise to as much as A$169 million. Suncorp-Metway , which owns insurers, AAMI, GIO and Vero, said it was too early to provide an accurate assessment on costs but revealed that it had received 11,500 claims. Page 19.
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Australian property group, Multiplex , is in Canadian hands following a "knock out? A$4.3 billion bid from Brookfield Asset Management. The deal ends 45 years of family control and involvement by the Roberts family, who sold their 26 percent Multiplex share for A$1.1 billion. Brookfield managing partner, Sam Pollock, described much of the Multiplex business as "complementary,? and said the stake would help Brookfield boost its investment in the region. Page 19.
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The announcement of a A$3 billion capital raising by Westfield Group has intensified speculation the property group is preparing a takeover bid for Dutch shopping centre owner, Rodamco Europe . Westfield managing director, Peter Lowy, said proceeds from the raising would be used to fund more than A$10 billion in new developments but would not disclose their locations. The raising, second in size only to a $3.6 billion effort by Australia and New Zealand Banking Group in 2003, is also hoped to revive Westfield?s stalling shareprice. Page 21.
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Winemakers in New South Wales? Hunter Valley say last Friday?s storm has given the local industry a much-needed boost. "It?s bloody fantastic,? said Bruce Tyrrell, whose family has made wine in the region for four generations. "This sets us up with a good chance for a good crop next year,? he said. De Bortoli Wines said that even though its grapevines were under 1.8 metres of water and the floor of the winery itself was up to ankle depth, production would not be affected. Page 23.
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THE SYDNEY MORNING HERALD <(SMH.COM.AU)
Qantas Airways may be on track for a record full-year profit of almost A$1.1 billion following the release of another set of strong monthly traffic figures. For the eighth time in 10 months, Qantas reported it had filled more than 80 percent of its seats, with overall loads up 0.8 percent to 82.2 percent in the year. Previously, Qantas had been expected to post a full-year profit of A$939 million. Page 22.
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Fortescue Metals Group has signed a memorandum of understanding with Atlas Iron over access to Fortescue?s port. The deal, to take effect next March, would allow Atlas to ship one million tonnes a year from the new berth at Port Hedland in Western Australia. The Atlas deal is seen as a demonstration of Fortescue?s commitment to open-access infrastructure in the middle of its long-running battle to gain access to BHP Billiton?s railway line. Page 23.
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Origin Energy will start construction in August on a A$780 million power plant to be fuelled by coal seam gas. Origin, Australia?s second-biggest energy retailer, will build the plant in the Darling Downs region in Queensland?s southwest. Full commercial operations have been scheduled for the first quarter of 2010. Page 25.
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THE AGE (theage.com.au)
A report by professional services firm, Ernst & Young, predicts public-private partnerships (PPPs) will be required to provide more than A$100 billion worth of infrastructure projects over the next 10 years. Page B2.
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The Australian Industry Group and the Australian Electrical and Electronic Manufacturers Association have announced a plan to merge. Ai Group said the merger would provide "substantial leadership? for the growing industry, particularly those in the digital supply market. It said it would continue representing employers in the construction, automotive, telecommunications and transport sectors. Page B2.
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New Zealand Prime Minister, Helen Clark, visiting Australia this week, said barriers between the two countries had been almost entirely removed. However, with up to 650 New Zealanders migrating to Australia each week, many are calling for greater tax alignment to keep more of the country?s top talent at home. New Zealand?s top tax rate of NZ40 cents in the dollar starts at NZ$60,000, compared with Australia?s top rate of A45 cents starting at A$150,000; this benchmark will be raised to A$180,000 from July 1 next year. Page B3.
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Dow Jones & Co?s controlling shareholder, the Bancroft family, has outlined conditions for a possible sale of the media group to Rupert Murdoch's News Corp . The terms and conditions include retaining the independence of Dow?s The Wall Street Journal, an issue which initially troubled the Bancrofts following Mr Murdoch?s US$5 billion offer. However, a review of Dow Jones? financial position and the merger of competitors, Thomson Corp and Reuters Group, forced a rethink and the Bancrofts met with Mr Murdoch last week. Page B7.
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