PRESS DIGEST-Australian Business News - Jan 14 06:34, Friday, 14 January 2005
(Compiled for Reuters by Media Monitors)
THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
WMC Resources Chief Executive Andrew Michelmore yesterday rejected criticism of the company's Target Statement, issued in response to the hostile A$7.4 billion takeover offer from Swiss miner, Xstrata. Xstrata has complained to the Takeovers Panel that the statement contains 'material misstatements and omissions,' particularly in relation to an independent valuation. Mr Michelmore said WMC believed the assumptions underlying the valuation were 'on balance...conservative.' Page 57.
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Travel retailer, Flight Centre , warned yesterday its interim pretax profit could fall by as much as 10 percent because of the price war between domestic airlines, but said it still expects a 15 per cent profit increase for the full year to the end of June. Chief executive, Shane Flynn, said the company would issue an update on full-year prospects with its interim results on February 17. He said some of the changes in prospect 'will have a dramatic effect on profitability.' Page 61.
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Newspaper publisher, John Fairfax Holdings , informed the Australian Stock Exchange yesterday it 'continues to assess strategic options' in the media industry, but said 'there are no developments to report to the market.' The company was forced to respond to newspaper reports that it was considering taking a A$1 billion stake in television company, Ten Network , which is owned by Canadian group, CanWest. CanWest and Ten declined to comment. Page 62.
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The Newcastle Stock Exchange (NSX) listed on the Australian Stock Exchange yesterday, with its shares rising A48 cents above their issue price of A50 cents. NSX chief executive, Michael Cox, said the exchange had been well supported by institutional investors, notably Bell Potter Securities, the underwriter for its float, which raised A$12 million. The Newcastle Stock Exchange opened five years ago and has 30 listed securities with another 10 preparing to list. Page 68.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Foster's Group and Southcorp are in talks that could see them merge to form a beer and wine company with revenues close to A$7 billion a year from 50 wine brands and 40 types of beer. News of the talks emerged yesterday with the announcement that Southcorp's biggest shareholder, the Oatley family, had sold its 18.8 percent interest to Foster's for A$584 million. Analysts saw the sale as a pre-emptive move by the Oatleys to keep Southcorp's world-recognised brands, including Penfolds and Rosemount, in Australian hands. Page 15.
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The price of shares in television broadcaster, Ten Network , rose strongly yesterday after The Australian reported that publisher, John Fairfax Holdings , was interested in taking a A$1 billion shareholding in the company. Ten's shareprice rose A24 cents to A$4.40, close to last month's record high of A$4.43. Ten's controlling shareholder, Canadian media group, CanWest , yesterday reported a 16 per cent increase in first-quarter operating income, most of which came from Ten. Page 15
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Woodside Petroleum announced yesterday it had scrapped development work on the A$5 billion Greater Sunrise gas project in the Timor Sea. It said no more money was being committed to the project and personnel working on it had been reassigned. The decision follows the refusal of the East Timor Government to ratify the development agreement signed with Australia in 2003. East Timor wants to re-negotiate the revenue-sharing provision, which favours Australia 80:20. Page 17.
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Federal Industry and Resources Minister Ian Macfarlane forecast yesterday that Australian liquefied natural gas (LNG) would be supplying the United States (US) west coast by 2009, initially from terminals in Mexico rather than California. Mr Macfarlane said Mexican authorities were well ahead of those in California in approving offshore LNG receiving terminals. The Australian industry hopes to supply the US with gas worth up to A$60 billion in the two decades from 2010. Page 17.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Executives of liquor companies, Foster's Group and Southcorp , will meet today to discuss a possible merger following the disclosure yesterday that Foster's had acquired a strategic 18.8 percent stake in Southcorp for A$583 million. Analysts are forecasting that Foster's will move to a full takeover offer at something more than A$4.50 a share, which would cost it more than A$3 billion. A merger would create a A$14 billion beer and wine group, better able to withstand any foreign bid during a period of global consolidation. Page 23.
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The Australian Broadcasting Authority (ABA) said yesterday that John Fairfax Holdings did not need its approval to buy into television company, Ten Network , but if the ABA found that an acquisition breached cross-media ownership laws it would issue a breach notice. How long Fairfax would have to rectify such a breach was a matter of discretion, said an ABA spokesman. The Fairfax board is expected to consider buying a strategic stake in Ten when it meets on Monday. Page 23.
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Australian Unity Investments, which has A$2.7 billion under management, says it plans to expand its use of boutique fund managers. 'This is the era of the boutique,' Australian Unity's general manager of investments, David Bryant, said yesterday. 'We are very open to the type of arrangements that attract these rare, highly talented people that give us an advantage.' Most of the successful boutique firms are run by specialised analysts formerly employed by big-name investment houses. Page 24.
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Low-cost domestic airline, Jetstar, owned by Qantas Airways , has announced another sale of 300,000 seats to further rev-up business in the post-holiday period. Jetstar announced a similar sale last month and said yesterday that most of those seats had now been sold. A spokesman said the company was trying to encourage additional travel during a traditionally quiet period but there was no suggestion of 'pushing the panic button.' Page 25.
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THE AGE (www.theage.com.au)
Bank of New Zealand (BNZ), owned by National Australia Bank (NAB) , has lost market share and is experiencing pressure on earnings, according to a report circulated yesterday by investment bank, Credit Suisse First Boston. The report said BNZ 'creates another relative negative issue for NAB compared with the major bank peer group.' BNZ contributed approximately 12 per cent of NAB earnings last year. Page B2.
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Analyst reports yesterday suggested that general insurer, Promina Group , should be able to increase its shareholder payout because of its strong capital position. They said that unless Promina found a large acquisition, it was likely to return excess capital in the form of a buyback, special dividend or increased dividend payout ratio. However, Deutsche Asset Management said an acquisition would be Promina's preference. Page B2.
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Woodside Petroleum reported more promising results yesterday from its Tiof-6 appraisal well in the oil exploration project off the coast of Mauritania, West Africa. The results renewed market expectations of a find of more than 300 million barrels, although Roc Oil, a partner in the venture, said the commercial significance of the results was yet to be determined. Woodside's shareprice rose A28 cents to A$20.71, and Roc's rose A4 cents to A$1.86. Page B3. --
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