PRESS DIGEST: Australian Business News : June 1 07:06, Thursday, 1 June 2006
(Compiled for Reuters by Media Monitors) THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
Gaming companies, Tattersall's Group and Unitab , yesterday released an information memorandum detailing their proposed A$4 billion merger, ahead of a shareholder vote next month. Tattersall's managing director, Duncan Fischer, dismissed a blow-out in the premium of Unitab shares to Tattersall's scrip amid speculation that Victorian rival, Tabcorp , will make a counter-bid for Unitab. Page 14.
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Nexus Energy is close to selling up to A$50 million of gas from its offshore Crux gas field, potentially hampering Anzon Australia's all-share hostile takeover offer. While the Crux field has been independently valued at A$42 million, the cash amount being considered by Nexus for the sale of gas is understood to be substantially higher. Page 15.
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Pay-television program producer, Premier Media Group, has sold a third Fox Sports channel to Foxtel and Austar, fuelling speculation the new channel will be used to cover Australian Football League (AFL) matches. Foxtel recently bought A$37 million of the 2007-2011 AFL broadcasting rights held by the Seven and Ten networks. Page 15.
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Regional pay-television provider, Austar , is signing up 3000 new subscribers a week from a promotion offering its services with a A$10 connection fee. Chief executive, John Porter, told Austar's annual meeting yesterday that sales in the first seven weeks of the June quarter were more than 15 per cent higher than the comparable period in 2005. He said Austar now had 565,323 subscribers. Shareholders approved a resolution allowing the company to buy back A$300 million in shares and make a capital repayment of the same amount. Page 17.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
A two per cent slump in shares yesterday confirmed May as the worst month for the Australian equities market in more than three years. Falling base metal prices and inflation fears in the United States have wiped A$88 billion from the value of stocks since the All Ordinaries Index reached a high of 5352 points on May 11. Page 21.
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Australian airports are lobbying the Federal Government to overhaul its recently revamped aviation policy, claiming it favours Qantas Airways ahead of passenger and tourism growth. The airports, spearheaded by Melbourne and Brisbane, are particularly concerned about recent Government decisions rejecting Singapore Airlines' request to start services between the United States and Australia, and refusing approaches from other foreign airlines. Page 21.
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Shares in McGuigan Simeon Wines fell to a seven-year low yesterday after it slashed A$20 million off the value of its inventory and withdrew its final dividend for this year. Managing director, Dane Hudson, said the impact on wine prices of oversupply meant the company had no choice but to write down the value of A$250 million of wine in storage. After plunging in early trading, McGuigan's shareprice recovered to close 5 cents down for the day at A$2.65 on relief that the write-down was not as big as the A$40 million predicted by analysts. Page 23.
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Foster's Group may have a dispute over A$237 million in tax losses heard in the Federal Court, after the Australian Taxation Office (ATO) told the beverage company it could not claim losses from a defunct subsidiary dating back to the 1980s. A company spokesman said ATO had questioned A$237 million in deductions during an audit of Foster's taxes in 1999 but had never issued an assessment notice requiring the amount to be paid. The losses relate to Foster's funding of the Elders Finance Group, which collapsed in 1992. Page 23.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Westfield Holdings Deputy Chairman, David Lowy, has been appointed to the board of James Packer's Publishing & Broadcasting Ltd (PBL) in a marriage of Australia's two richest families. Lowy, 51, is the eldest son of billionaire Westfield founder, Frank Lowy, and a shareholder with Mr Packer in venture capital group, Tinshed. PBL also confirmed yesterday that Qantas Airways chief executive, Geoff Dixon, had joined the board. Page 27.
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The National Competition Council (NCC) has thrown its support behind Fortescue Metals Group , recommending the junior miner be granted the right to negotiate with BHP Billiton to use its 295-kilometre rail line in Western Australia to ship iron-ore to Port Hedland. NCC chief executive, John Feil, told a Federal Senate committee yesterday it was uneconomical to build a special rail line from the Pilbara to the coast. Millions of dollars of iron-ore would be stranded in the region unless an agreement was struck, Feil warned. Page 28.
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Australian building activity grew only slightly in the March quarter as a pick-up in infrastructure work helped offset further falls in residential construction. Figures released yesterday showed the value of total building work fell 0.7 per cent for the quarter, seasonally adjusted. The Australian Bureau of Statistics valued building work for the March quarter at A$13.267 billion, compared with A$13.361 billion in the December quarter. The value of total construction, which includes engineering, rose 0.2 per cent to A$22.922 billion. Page 28.
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The Australian Securities and Investments Commission (ASIC) is "very much alive" to suing KPMG, the auditor of failed property developer, Westpoint Group, in a negligence action to recover A$300 million owed to investors. ASIC chairman, Jeffrey Lucy, warned yesterday the regulator would instigate legal action "in the event there was nobody else willing to take it". KPMG is being investigated for signing an unqualified Westpoint audit report in 2004 and allegedly breaching its obligation to report solvency concerns. Page 29.
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THE AGE (www.theage.com.au)
Stevedoring productivity at Australia's five main ports has started to plateau but remains high, according to the latest Waterline report. Waterline, published by the Bureau of Transport and Regional Economics, found that the crane rate for the five ports rose from 27.2 containers-an-hour in the 2005 September quarter to 27.7 containers in the December quarter. Waterline also found that export costs had risen to A$606 per TEU (20-foot equivalent unit) for July-December 2005, 3.9 per cent more than the same period in 2004. Page B2.
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Victoria's RMIT University has approached leasing agents for office space near Building 108, the structure embroiled in the brain tumour controversy. Industry sources say the requirement is for fitted-out space of 2000-4000 square metres, as close as possible to the RMT Business School. Last month, it was revealed that seven employees working on the top two levels of the school developed brain tumours over a seven-year period. Those levels remain closed while authorities assess radiation, magnetic and chemical levels. Page B3
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Transport group, Toll Holdings , has begun selling the assets it promised to divest to secure regulatory approval for its A$6 billion-plus takeover of stevedore, Patrick Corp. . Toll said yesterday it had appointed Goldman Sachs JBWere to manage the sale on behalf of rail operator, Pacific National (PN). Earlier this year, Toll promised the Australian Competition and Consumer Commission it would sell half of PN if the Patrick bid succeeded. Page B3.
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Sacked Primelife Corp chief executive, Ted Sent, has told the Supreme Court of his links with Melbourne underworld figure, Mick Gatto, and a leading building union. Sent revealed yesterday that Gatto brokered 10 meetings between senior members of the Construction, Forestry, Mining and Energy Union, the former Primelife boss and Gatto. Sent, who is suing his former employer for wrongful dismissal, told the court last week that Primelife paid Gatto more than A$200,000 million for services on building sites. Page B3 --
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