opes alleged statement, page-79

Tricom's & ANZ's last & dance?
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The Spectators

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Bartholomeusz: Rio stays on message
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INTERVIEW: Michael Luscombe
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INTERVIEW: David Mills
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Kohler: Tricom's last dance?
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Gottliebsen: Centro's cliff-edge ride

Lance Rosenberg is a bit like one of those marathon dancers in the depression film They Shoot Horses Don’t They? – dead on his feet but refusing to keel over.

Last Thursday the founder of Tricom Equities found out that his latest saviour, Saxo Bank of Denmark, was pulling out. Apparently, the previous day had been another one of constructive talks, working on the final documentation, three months after the deal had been formally announced at a press conference with smiles and handshakes. That was a few weeks after Bell Securities had pulled out.

Now Rosenberg has lurched across to his next dance partner, ANZ CEO Mike Smith. Will Mike be the one to take Lance home after the dance?

Saxo, like Bell before it, was going to put in $20 million for 35 per cent of the firm. Saxo and Bell both seem to have pulled out because of dissatisfaction with the indemnities being provided by Tricom’s lenders and smaller shareholders, ANZ and Babcock & Brown.

The indemnities were designed to insulate Saxo (and Bell) from claims by creditors against the old Tricom, but they were not unlimited, just “meaningful”, according to a source close to the talks.

The advantage to now dealing with ANZ instead of Saxo and Bell, is that it doesn’t have to put in new cash – just convert some of its debt to equity – and it doesn’t need indemnities.

The disadvantage is that it would not be a good look for ANZ to take equity in Tricom just a few days after confessing its sins before Saint David Crawford and promising never to do it (securities lending) again. And let’s face it – Tricom isn’t exactly the most desirable stockbroking brand in Australia.

ANZ’s being coy about the prospect of a deal at this stage, but it would be quite an irony if Tricom Equities became ANZ’s stockbroking arm.

Although the firm is notorious for securities lending, in fact it is now a straightforward institutional and retail equities broker, as well as foreign exchange and futures broker, with an online platform powered by Saxo bank. The loan book is down from more than $2 billion to $81 million, and falling.

But like all the banks, ANZ’s experience with stockbroking in the past is not happy one.

In a flurry during the mid-1980s, ANZ, Westpac and NAB bought McCaughan Dyson, Ord Minnett and AC Goode & Co respectively. NAB closed Goode down in a couple of years, Westpac sold Ord Minnett to JP Morgan and ANZ closed down ANZ McCaughan a few years ago after 17 years of losses and unhappy distraction.

A few months ago ABN Amro was put on the market by its owner, Royal Bank of Scotland, and all of the local banks kicked its tyres before walking away, including ANZ (but not publicly).

ANZ now has 7.5 per cent of Tricom and another 35 per cent would give it 42.5 per cent and control. The other shareholders are Babcock & Brown 7.5 per cent, Lance Rosenberg 25 per cent and staff 25 per cent.

By the way, B&B’s shareholding is also separately on the market, along with many of B&B’s assets.

So Mike Smith could end up inheriting another stockbroker, and one with a blackened name.

Presumably it won’t be called ANZ Tricom. Will it even have ANZ, or Tricom in its name at all?

Suggestions anyone?