PRESS DIGEST-Australian Business News - April 10 07:57, Monday, 10 April 2006
(Compiled for Reuters by Media Monitors)
THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
Australia's largest privately owned pubs business, The Laundy Group, is reportedly considering offers for its 35-hotel chain, worth an estimated A$500 million. 'The family is keen to entertain the thought of selling,' said one industry source. Rumoured potential buyers, Woolworths and Coles Myer , yesterday downplayed the possibility of an acquisition to add to their billion-dollar pubs portfolios. Pubs have been fetching record prices in recent years, following the introduction of poker machines in all states except Western Australia. Page 12.
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Retailer, Harris Scarfe, is planning to offer a A$30 million-plus stake in its business to private equity firms later this year after downsizing its larger city-stores. Chief executive, Robert Atkins, said Harris Scarfe no longer considered itself a discount department store competing against BigW and Kmart, and had repositioned itself as a specialty apparel and homewares retailer. Stock-turn ratios had improved to more than four times, double that of the business when it was bought out of receivership by a consortium headed by Mr Atkins in 2001. Page 12.
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A Macquarie Infrastructure Group -led consortium may be thwarted in its A$11.3 billion bid for French toll-road, Autoroutes Paris Rhin Rhone (APRR), by hedge funds that have taken a blocking stake ahead of the offer's expiry on Thursday. United States hedge fund group, Elliot Management Corp, lifted its stake in the tollway to 7.01 per cent on Friday, potentially denying MIG access to vital tax benefits should the bid fail to achieve 95 per cent. Page 12.
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News Corp may implement a one-year 'poison pill' shareholder rights plan should a party acquire a five per cent stake or make an offer for 30 per cent or more of the media group, under an agreement with institutional investors last week.
Shareholders are expected to vote on an extension of the poison pill to November 2008 at the annual general meeting in October. News Corp used the poison pill in 2004 when Liberty Group increased its stake from nine to 17 per cent. The plan afforded shareholders a right for each News Corp share they own to acquire more shares at half price. Page 13.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
A consortium led by Macquarie Bank and Swedish private equity group, EQT Partners, has bought the Select Service Partner (SSP) catering unit of Britain's Compass Group for A$4.4 billion in a deal that will make Macquarie one of the biggest truck-stop café operators in Britain. EQT will take over SSP's airport and railway catering division, with Macquarie to assume control of 44 motorway services operations across the country. These have a 42 per cent market share in Britain's highly concentrated trunk-road network. Page 25.
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Patrick Corporation will begin a Federal Court challenge this week to overturn a decision by the Australian Competition and Consumer Commission (ACCC) approving undertakings made by hostile bidder, Toll Holdings . Toll has promised the ACCC it will sell half of the Pacific National rail joint venture it owns with Patrick if it succeeds in its A$5.3 billion takeover of the stevedore. However, Patrick has challenged Toll's right to sell off the business and give up key assets, arguing this would be in breach of directors' duties under the Corporations Act. Page 25.
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Publishing & Broadcasting Ltd and Asian joint venture partner, Melco International Development, are expected to clarify details of their plans for the A$1.4 billion City of Dreams casino project in Macau at the ground-breaking ceremony tonight. PBL indicated recently that a design for an underwater casino had been shelved, while Melco informed the Hong Kong Stock Exchange last week the casino would feature 'world class gaming facilities in an underwater environment.' The PBL-Melco group has already delayed plans to open its first casino, in the A$300 million Crown Macau, until next year. Page 25.
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The Business Council of Australia (BCA) has dismissed calls from six companies at last week's Business Roundtable on Climate Change to lobby the Federal Government for a carbon tax. Six chief executives, including Westpac Banking Corp's David Morgan, Origin Energy's Grant King and Insurance Australia Group's Michael Hawker - all BCA members - called for the introduction of a carbon-pricing policy invoking financial penalties for greenhouse gas emissions. However, BCA said it was already considering climate change in its infrastructure action plan released last year. Page 27.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Australian Securities and Investments Commission (ASIC) chairman, Jeffrey Lucy, says the civil case against the world's biggest bank, Citigroup , is not designed to regulate proprietary trading but to establish banks' legal obligations to their clients. 'Banks have an obligation to manage their conflicts of interest to a client they are advising,' Mr Lucy said yesterday. ASIC began Federal Court action against Citigroup last month, alleging the bank breached its fiduciary duty to Toll Holdings - which it was advising on a planned takeover of Patrick Corp - when it traded Patrick shares in August last year, just before Toll made its bid. Page 17.
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British online betting exchange, Betfair, which is a partner in Australia with Publishing & Broadcasting Ltd , will return more than A$717 million to shareholders after the unlisted company closed a deal with Softbank, the Japanese Internet group. Softbank has bought a 23 per cent stake in Betfair for £355 million, of which £45 million will be invested directly in the company via new shares. Launched six years ago, Betfair allows customers to bet against each other instead of accepting fixed odds from a traditional bookmaker. Page 18.
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The Australian stockmarket is due for a correction after gaining more than 10 per cent this year, but this will take place later rather than sooner, economists say. The benchmark S&P/ASX200 Index closed at 5232.9 points last week and the All Ordinaries at 5186.6, with surveys on business and consumer sentiment indicating continued confidence in the national economy. 'Fair value for the ASX200 is around 5600 so the market still has a fair way to go before it can be considered expansive,' said AMP Capital Investors chief economist, Shane Oliver. Page 19.
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Troubled West Australian gold producer, Croesus Mining , believes it can stave off administration with the help of its financier, Macquarie Bank, after appointing former Consolidated Minerals operations director, Allan Quadrio, as new managing director last Friday. Croesus suspended trading on the Australian Stock Exchange on March 16, when high production costs and inflated hedging commitments forced it to institute a business review. Macquarie agreed in principle to help Croesus restructure its hedging commitments but has not yet signed a final deal. Page 19.
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THE AGE (www.theage.com.au)
The Federal Government's Future Fund will only defer superannuation liabilities rather than cure them, says AXA Asia Pacific Holdings chief executive and member of Treasury's Financial Sector Advisory Council, Les Owen. 'The key question is: what are they going to invest the Future Fund in? Because if they don't invest it in something that's going to lead to faster economic growth than the alternative, then...it won't achieve anything,' said Mr Owen. The Future Fund was established in 2004 to help fund public servants' superannuation. Page B1.
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Listed pine group, Willmott Forests , has signed an agreement with Hancock Victorian Plantations to finance new pine plantations on Hancock land. With the arrangement, Willmott will have access to high-quality timber country in Victoria at a time when there is disquiet in regional areas at farm land being sold for plantations and pushing up prices. Willmott, a pine plantation manager and processor based in Melbourne, has more than 24,000 hectares of pine plantations, mainly in southeast New South Wales. Page B2.
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The board of cancer drug developer, Psiron , is being pressured to resign after a fundraising plan was abandoned amid allegations of conflict of interest involving two directors. Chairman, Stephen Jones, and non-executive director, Wolf Hanisch, have been accused by the company's stockbroker, DFS Equities, of acting improperly in relation to a proposal by the Australian Technology Innovation Fund to invest up to A$5 million. Both are directors and part owners of the fund. Psiron has rejected the allegations and threatened to sue DFS Equities over the claim. Page B2.
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