Australia

Tech IPO gives bad SPAC deals run for their money

15 June 2021

Macquarie-sponsored Nuix’s CEO and CFO resigned after poor earnings and forecast revisions within six months of taking the Australian software maker public. Blank-cheque deals like Lordstown are known for hype and under-delivery, and now this ordinary listing has managed it too.

Software deal contains two-sided logic errors

7 June 2021

Sydney-listed Altium spurned a $3.9 bln takeover bid from larger U.S. peer Autodesk. It’s an odd response given recent struggles and the chunky 42% premium on offer. The maths doesn’t compute for the suitor either. In wild M&A markets, such behaviour is a feature rather than a bug.

Aussie M&A silly season gets sillier

4 June 2021

Link Group and investment bank Barrenjoey managed to get a better IPO deal for PEXA. But Roc Partners’ brawl over Vitalharvest is getting messier, and Betmakers’ $3 bln bid for a Tabcorp unit is blowing up. It sends a message to this unusually fractious market: “Calm down.”

Star’s stack looks too short to win Crown deal

31 May 2021

The Aussie casino operator’s $7 bln offer interested its larger rival, unlike the Blackstone bid that was dubiously spurned. Star’s proposal is less than it’s cracked up to be, however, and there’s little wiggle room to improve it. Only gaming regulators can help its cause.

Nutty berry deal sows competitive seeds Down Under

28 May 2021

Battles like Blackstone’s for Crown, BetMakers’ for parts of Tabcorp and KKR’s for PEXA position Australia for a bumper year of contested M&A. Plentiful money and growth in buyers, bankers and bravado all play a role. A two-sided, 16-bid fruit-farm fight already portends excess.

Car-charging deal curbs SPAC sticker shock

27 May 2021

Australia-based Tritium’s $1.7 bln blank-cheque merger includes bold revenue predictions typical of such tie-ups. But it values the manufacturer of electric-vehicle fast chargers at a decent discount to rivals and isn’t raising extra cash. The relative thriftiness is welcome.

UK hospital M&A gives risky fix for future ailment

26 May 2021

Australia’s Ramsay Health Care may buy Spire for 1 bln pounds, creating Britain's largest private operator. It can profit from the Covid-19 recovery, and hedge against government cost-cutting. But for the deal to work, competition authorities will need to be gentle.

UK-Aussie trade talks expose post-Brexit tangles

20 May 2021

Prime Minister Boris Johnson wants to lower tariffs for goods from Down Under. A deal would bring only a little more growth, cost UK farm jobs, and set a benchmark for negotiations with others. It’s getting harder for Johnson to ignore the tradeoffs after leaving the EU.

Workers get the whip hand in economic policymaking

19 May 2021

New Zealand will cut low-skilled migration, U.S. President Joe Biden is hiking the minimum wage for federal contractors, and rate-setters everywhere are giving labour markets time to tighten. Such measures will help push up pay. Expect profit margins to fall or prices to rise.

Australia’s non-takeover takeover is a bit creepy

11 May 2021

Billionaire Kerry Stokes’ Seven Group lobbed in a nil-premium $6.2 bln bid for building materials maker Boral. It really just wants to up its 23% stake and perhaps claim another board seat. Such tactics may be sly investing, but they also play loose with the spirit of M&A rules.

Star tempts Crown with riskier game of chance

10 May 2021

The Aussie casino operator is proposing an all-stock merger valuing its larger rival at $7.1 bln, including synergies. The deal is loaded with iffy assumptions about benefits that would take time to materialise. Even so, Blackstone will be pressured to sweeten its cash bid again.

Macquarie will struggle to match market exuberance

7 May 2021

The Australian banking and investment powerhouse earned a record A$3 bln in its latest financial year. CEO Shemara Wikramanayake runs a tight and well-balanced ship. That deserves a premium, but a 14% return on equity doesn’t justify a stock price of 2.6 times book value.

Blackstone fights time more than Oaktree for Crown

3 May 2021

It’s hard to see value in Oaktree’s plan to fund a buyback of founder James Packer’s 37% stake in the Aussie casino operator. And yet Blackstone is willing to absorb more regulatory risk. That suggests concern that as Crown’s crisis ebbs, the $6 bln bid’s appeal may too.

Vaccine prince exposes India’s best and worst

3 May 2021

The Serum Institute, the world’s top vaccine maker, is under heavy pressure, with owner Adar Poonawalla complaining of “unprecedented” threats from politicians and tycoons trying to secure jabs. India’s flawed procurement policy is straining fraught ties with the private sector.

Australia’s border strength morphs into weakness

28 April 2021

Strictly banning outsiders has been a big factor in stopping the spread of Covid-19. Fiscal stimulus and low rates have helped compensate, but can’t replace the annual 1% growth delivered by immigrants. Absent bold policy changes, the age of economic miracles may be past.

Blackstone gamely reboots Indian IT deal

26 April 2021

The investor is selling control of Mphasis within its own funds. Sovereign money will join, validating a $2.8 bln commitment that includes a public offer. With U.S. cloud migration gaining pace even as the virus spikes in the company’s home, it may be a crafty self-passed parcel.

Beleaguered Aussie duo careen into dizzying spin

26 April 2021

Carving out businesses is meant to unearth buried value for shareholders. Wealth manager AMP and energy giant AGL, though, are doing so as a last resort of sorts after other strategies failed, and with CEO upheaval to boot. Starting from such a weak position does not bode well.

Blackstone sale delivers small logistics message

19 April 2021

It’s offloading Australian warehouses it rolled up to ESR and Singapore’s GIC for nearly $3 bln. The buyout shop’s real estate timing is always worth watching. In this case, it probably says less about a peak in e-commerce property than finding value in other parts of the chain.

Lithium merger flips electric-vehicle deal script

19 April 2021

The $3.1 bln tie-up of rivals Orocobre and Galaxy creates the fifth-largest miner of the crucial metal for battery-powered cars. The all-share deal is devoid of splashy predictions and juicy premiums. A fast-lane valuation multiple, though, drives home the strategic importance.

Aussie power giant spins into climate quandary

30 March 2021

AGL Energy hopes running its generation and retail units as separate businesses will lift its slumping stock. But CEO Brett Redman’s pitch is short on financial detail, envisions himself as boss of both parts, and leaves the $5 bln company heavily reliant on fossil fuels.