press digest: australian business news: april

PRESS DIGEST: Australian Business News: April 3
06:56, Tuesday, April 03, 2007

(Compiled for Reuters by Media Monitors)

THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

-- Talks continued yesterday between the consortium partners
bidding for Qantas Airways , as they attempt to repackage
the A$11.1 billion offer to overcome resistance from two
institutional shareholders. The shareholders say they will reject
the A$5.45-per-share offer unless Qantas' earnings outlook
changes significantly or the sharemarket sinks. Meanwhile, Qantas
has expedited its fleet expansion to prevent the consortium,
Airline Partners Australia, from withdrawing its offer in light
of increased competition from Virgin Blue and Tiger
Airways. Page 16.

--

SP AusNet may have to raise up to A$2.6 billion to
fund its involvement in the break-up of Perth-based utility,
Alinta . SP is currently reviewing its options for
Alinta, whose board has supported a A$7.4 billion buy-out from
SP's parent, Singapore Power, and its joint venture partner,
Babc ock & Brown . If the deal is successful, SP could buy
all or part of the Alinta assets acquired by Singapore Power. An
SP spokesman said the company would outline the process soon but
that a decision on which assets it would buy was "a long way
away." Page 16.

--

The appointment of a United States (U.S.)-based chairman has
highlighted the growing overseas focus of Australian building
materials company, James Hardie Industries . Don
DeFosset, a board member for only four months, was appointed
following the February resignations of three directors after the
Australian Securities and Investments Commission launched civil
proceedings against them. Macquarie Equities analysts said James
Hardie would especially target the US market, where it made 79
percent of its revenue in 2005-06. Page 16.

--

Crane hire group, Boom Logistics , has talked down
expectations of a 33 percent jump in earnings for the full
financial year, after three cyclones in north-west Western
Australia and flooding in central Queensland forced closures at
some clients' operations. Boom's forecast follows disappointing
half-year results, announced just weeks ago, and the recent
departure of its chief executive. Second-half earnings are
expected to be only marginally higher than the A$19.6 million
half-year figure. Boom's shares have now fallen 20 pecent since
mid-February. Page 17.

- -

THE AUSTRALIAN (www.theaustralian.news.com.au)

-- United States coal giant, AMCI, says it will dispute
claims by Perth miner, Aquila Resources , that it
restructured control of its holdings in two Australian joint
ventures. Aquila has brought in legal heavyweight, Mallesons
Stephen Jacques, and adviser, Macquarie Bank, to contest the
A$124 million legal case, which Aquila says triggered an option
for it to acquire AMCI's stakes. The dispute has sparked
speculation that AMCI was restructuring its ownership in order to
sell its stake in an iron ore project operated by Australian
Premium Iron. Page 19.

--

Australia's third-largest supermarket chain, Independent
Grocers of Australia (IGA), has reported a surge in the number of
independent retailers seeking to join the group. The 1300-store
network pools its buying power through its owner, Metcash
, and operates under a common brand to cut marketing and
advertising costs. IGA national chairman, Fred Harrison, said IGA
was fielding "very strong" inquiries from supermarket owners
currently signed up with its rivals, and that it was
outperforming the larger chains, Woolworths and Coles
. Page 19.

--

Analysts say the receivers of Sydney's Cross City Tunnel,
KordaMentha, will struggle to get near the A$570 million they've
requested for the struggling toll road. KordaMentha said it had
received a "significant level of serious, unsolicited inquiry in
the tunnel," but that it would not accept less than the amount
the tunnel owes to creditors. Austock said it would be surprised
if anything near the requested amount was achieved, given the low
traffic figures for the tunnel. Toll road developer, Transurban
, is believed to be the most likely buyer. Page 19.

--

Retirement villages have been identified as a fast-growth
sector following the creation of a A$1 billion joint venture
between AMP Capital Investors and Queensland developer, Meridien.
The deal gives the pair a portfolio of 19 Australian and New Zealand
retirement villages, and a 6 percent share of the
Australian market. AMP has also flagged the possibility of a
public float of the new venture, which it says is unlikely in the
short term. Only 3 percent of Australians live in retirement
villages, compared with 10 percent in the U.S. Page 20.

- -

THE SYDNEY MORNING HERALD (www.smh.com.au)

-- Telstra has denied reports it is close to signing
an agreement with the Federal Government over investment in a
high-speed broadband Internet network. The telecommunications
provider is involved in a deadlock with the Australian
Competition and Consumer Commission (ACCC) over the allowable
rate of return from charging rivals access to a new network.
Telstra's public policy chief, Phil Burgess, says the Government
has been "unwilling to provide the required policy guidelines"
and that it needs to take back the powers it gave the ACCC. P20.

--

Property group, GPT , has boosted its funds
management business with the launch of a new A$2 billion
wholesale shopping centre fund. The fund includes eight shopping
centres throughout Sydney and Melbourne, with centres in Darwin
and Newcastle to be included in coming years. GPT plans to use
the management fees generated by the fund's creation to acquire
more assets; a wholesale vehicle for industrial assets is already
planned, adding to a A$1.3 billion office fund established last
July. GPT has A$4.3 billion in funds under management. Page 21.

--

News Ltd. has completed a deal to purchase
Federal Publishing Company's (FPC) newspaper, magazine and online
assets. The transaction includes FPC's 13-strong community
newspaper operations and six online properties, including
vogue.com.au, notebook.com.au and villagevoice.com.au. The deal
by News, a subsidiary of Rupert Murdoch's News Corporation, was
flagged in January when it received clearance from the Australian
Competition and Consumer Commission to go ahead with the deal,
estimated to be worth A$180 million. Page 21.

--

Fears of an interest rate rise led the Australian sharemarket
into negative territory yesterday, with the major banks bearing
the brunt of poor investor sentiment. Miners, BHP Billiton
and Rio Tinto , also eased, while the energy
sector was also weaker. The benchmark S&P/ASX200 Index closed
79.2 points lower at 5915.8, while the broader All Ordinaries
fell 70.6 to 5908.2 points. Page 22.

- -

THE AGE (www.theage.com.au)

-- Macquarie Media Group (MMG) could use tomorrow's
change in the media ownership laws to initiate a full takeover of
Southern Cross Broadcasting . Under the present rules,
MMG is limited to owning less than 15 percent of Southern Cross
to avoid controlling radio and television stations in the same
market. MMG currently has a 13.8 percent stake in Southern Cross,
which is Ten Network's biggest regional affiliate.
Southern Cross also owns Channel Nine in Adelaide, talk-radio
stations 2UE and 3AW and production company, Southern Star. P B1.

--

The National Farmers Federation says more rain is needed to
boost production and allow Australia's A$100 billion agriculture
sector to take advantage of strong commodity prices. Commodity
prices are as high as they have been for 20 years, according to
economists, though the high Australian dollar is restraining
growth with predictions it will trade in the US75-80 cent range
through to the end of the year. Page B2.

--

Merrill Lynch and Pacific Equity Partners (PEP) have
confirmed their A$814 million joint bid for credit information
group, Veda Advantage . The deal represents the first
time Merrill, the United States investment banking giant, has
entered the Australian private equity market, while PEP has just
completed takeovers of drinks group, Independent Liquor, and
vacuum cleaner retailer, Godfreys. It is also attempting to
acquire Flight Centre . The offer requires the support of
75 percent of Veda's shareholders, with its major shareholder
already backing the deal. Page B3.

--

Meetings have begun between CanWest Global Communications
Corp and potential buyers of its struggling television
broadcaster, Ten Network. Merrill Lynch Private Equity, Carlyle
Group and Blackstone Group LP are among companies bidding as much
as A$2.7 billion for Ten, which recently posted a 12 percent drop
in first-half profit as it increased spending on new programs.
Canada's CanWest is selling the Sydney-based network, Australia's
third-ranked, to take advantage of changes in Australian media
laws, due to come into effect tomorrow. Page B3.

--

Looking for more information from local sources? Factiva.com
has 112 Australian sources including the Australian Financial
Review.
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Keywords: DIGEST AUSTRALIA BUSINESS