PRESS DIGEST: Australian Business News: Aug 29 06:49, Tuesday, 29 August 2006
(Compiled for Reuters by Media Monitors) --
THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
Telstra chief executive, Sol Trujillo, says he will appeal against the competition regulator's ruling that rivals should be charged less to use the phone company's copper-wire network, arguing it will 'destroy value for shareholders.' Media analysts fear the ruling will test Telstra's agreement not to use the Federal Government's A$8 billion share sale to agitate for regulatory reform. Opposition Leader, Kim Beazley, agreed with Mr Trujillo that the dispute was hampering negotiations over investment in faster broadband services. Page 1.
-- Federal Opposition revenue spokesman, Joel Fitzgibbon, says revelations about retailer, Coles Myer , becoming a foreign takeover target vindicate Australian Labor Party concerns about proposed capital gains tax changes for foreign investors. The Opposition believes foreign shareholders should not be permitted tax concessions when exiting their investment after three to five years. A takeover bid for Coles is now likely after American private equity firms indicated they were preparing an enlarged group offer. Page 12.
-- Tote operator, Tabcorp , has compensated for a failed takeover bid for rival, UniTab, by negotiating a multi-layered deal with the New Zealand Racing Board. 'Australia and New Zealand have some of the best racing in the world [so] there is an opportunity to take it to more markets,' said Tabcorp chief executive, Matthew Slatter. Mr Slatter said a two-hour time difference between the t countries would help the distribution of Australia's racing product throughout the Asia-Pacific. Page 12.
-- Australia's largest private hospital operator, Ramsay Health Care , may spend up to A$400 million on expanding capacity at its key domestic facilities and accelerate offshore expansion, after posting a 177 per cent rise in full-year profit. 'We believe returns at big hospitals in good socio-economic areas will be super,' said Ramsay chief executive, Pat Grier. Mr Grier added acquisitions in Indonesia were performing well and provided a solid base for further expansion into Asia. Page 13.
-- THE AUSTRALIAN (www.theaustralian.news.com.au)
Shares in telecommunications provider, Telstra, closed steady yesterday, despite concern a five-week delay on this year's dividend announcement and an ongoing regulatory dispute with the Federal Government would impact on Telstra's value. 'In the absence of further detail...we would not be buyers of the stock,' investment bank, Citigroup, advised. Cabinet is seeking to ensure Telstra does not overcharge rivals for use of its copper wire-network, ahead of the upcoming float of 18 per cent of the Government's holding. Page 21.
-- A profit announcement well above guidance from childcare provider, ABC Learning , failed to prevent a 4.5 per cent drop in ABC's shareprice yesterday. Analysts attributed the fall to ABC's failure to indicate the company's prospects for the current year. While reaffirming long-term targets for opening new centres, ABC also failed to give firm guidance on its American operations, amid claims it is still in the process of increasing acquisitions in that country. Page 23.
-- Gold miner, Newmont , and Tasmanian Government-owned utility, Aurora Energy, have agreed to forgive debts owed by Allstate Explorations in a bid to improve chances the Beaconsfield gold mine, the scene of a mining accident in April, will be reopened. Beaconsfield Gold, the junior partner in management of the mine, is believed to have secured equity for a bid to purchase Allstate's 31 per cent majority share. Page 23.
-- Domestic carrier, Virgin Blue , is hopeful a partnership with Malaysia Airlines (MAS) will gain its passengers access to 47 MAS flights per week into five Australian cities. Virgin Blue chief executive, Brett Godrey, said upgrades of reservations and other systems were improving the carrier's capacity to negotiate partnerships with other airlines. Virgin Blue currently has a small code-sharing alliance with United Airlines and an agreement with Virgin Atlantic on flights into Sydney. Page 23.
-- THE SYDNEY MORNING HERALD (www.smh.com.au)
The acquisition of wine producer, Southcorp, and a global wine glut may have left Australian brewer, Foster's Group , open to takeover bids from the world's two largest brewers, InBev and SABMiller. InBev and SABMiller have both expressed interest in expanding into the Asia-Pacific region, with SABMiller having already formed a joint venture with Coca-Cola Amatil Australia earlier this month. Foster's is expected to announce a revamp of its wine operations during its full-year profit announcement today. Page 17.
-- Specialist entertainment asset investor, Macquarie Leisure Trust , has initiated expansion into the United States by purchasing Texan tenpin bowling operator, Main Event Entertainment Holdings. 'Main Event enjoys a good spread of visitors and activities from kids' parties to upmarket corporate events,' said Macquarie Leisure chief executive, Greg Shaw. Mr Shaw said Main Event would complement Macquarie Leisure's ownership of AMF bowling alleys across Australia. Page 18.
-- Shares in Austereo closed 3.42 per cent higher after the commercial radio broadcaster posted a 3.1 per cent rise in profit for the year to June 2006, and forecast a two per cent rise in capital-city advertising revenue growth for the first half of 2006-07. Page 19.
-- Allco Finance Group, which invests in aviation, shipping, rail and property assets, reported a 57 per cent boost in annual profit yesterday. Allco said further expansion into the global aviation market would provide opportunities for additional growth. 'We see the aviation market growing [and] deal flow remains very strong,' said managing director, David Coe. Mr Coe believes that increased passenger travel in China, and orders by airlines for new planes in Asia, are signs the adverse effects of higher petrol prices are easing. Page 19.
-- THE AGE (www.theage.com.au)
Australia's largest banks may adopt a new model for reorganising their assets into 'non-operating holding companies' (NOHC) in response to recent changes to the way in which households save or spend their money. In 1997, the Federal Government-commissioned Wallis Inquiry recommended NOHCs be allowed, to help banks manage their investment risks and to foster greater banking industry competition. National Australia Bank , Commonwealth Bank and Macquarie Bank will be the first to adopt the new model. Page B1.
-- Corporate and investment bank, Rabobank, says its rural confidence survey for the previous quarter shows that farmers remain worried about the economic future, as dry conditions and high petrol prices continue to raise input costs. 'Rain in spring will be critical to the winter cropping season, pasture and water supplies for livestock,' said Rabobank rural banking head, Neil Dobbin. Fears are mounting that many farmers will leave rural industries unless the weather outlook becomes more favourable. Page B2.
-- Car parts and accessories distributor, Repco , has cancelled its final dividend after second-half earnings slumped. 'We are pausing new store openings so we can focus on improving our trade business and our retail offering,' said Repco chief executive, Graeme Yeomans. Mr Yeomans attributed the 'disappointing' result to the cost of expanding its store network as well as higher petrol prices, which were prompting car owners to defer repairs. Repco will put A$14.4 million in surplus capital towards paying off debt. Page B2.
-- American pharmaceutical companies have seized on a commitment to the United States (US) free trade agreement (FTA) by new United States ambassador, Robert McCallum, to renew their push for better access to the Australian medicine market. 'We don't view this as being a dead issue,' Mr McCallum said yesterday, despite the collapse of the recent Doha round of trade talks. Critics of the FTA say US drug companies seek to dismantle the Pharmaceutical Benefits Scheme, under which the Federal Government subsidises drugs. Page B2.
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