Australia

Telstra’s slashing falls short of a full strategy

20 June 2018

The $26 bln Australian telco will cut one in four jobs, sell assets and put infrastructure in a standalone unit that could raise fresh capital. CEO Andy Penn’s austerity beats past scattergun attempts at reinvention. But there is no clear growth plan to get investors fired up.

South32 finds acceptable way to splash the cash

18 June 2018

The BHP spinoff is paying $1.3 bln for the rest of Canadian miner Arizona Mining. The 50 percent premium sounds reminiscent of past mining M&A excess. Yet the deal makes strategic sense, and isn’t too pricey. Besides, South32 needs to deploy its mountain of net cash.

India’s taxi-app war enters China territory

15 June 2018

Local operator Ola lost over $700 mln in the year to March 2017 despite growing revenue 70 pct. That’s nearly as much as Uber was burning when it was battling China’s Didi. The U.S. company’s commitment to India suggests losses will keep piling up for both SoftBank-backed firms.

The Exchange: Italy’s almost premier

15 June 2018

Carlo Cottarelli talks about how he nearly led a caretaker government after President Sergio Mattarella last month rejected a euroskeptic finance minister put forward by the parties that won March elections. The former IMF economist has some advice for Italy’s new bosses.

Viewsroom: AT&T win is unlikely to muzzle watchdogs

14 June 2018

The telco firm prevailed against the DOJ and can now legally buy Time Warner for $85 bln. The green light doesn’t mean that regulators will roll over for other deals however. T-Mobile US and Sprint may still be in the crosshairs. Plus: An Australian bank cartel runs into trouble.

CKI’s $10 bln bid can snare Australian prey

13 June 2018

The Hong Kong giant is circling Australia's top gas pipeline firm. A 33 pct premium ought to satisfy APA’s board, especially as tougher rules bite. The odds are good for Victor Li’s first big deal since he took over from father Li Ka-shing at parent company CK Hutchison.

M&A pause is promising for Wesfarmers investors

7 June 2018

The $39 billion Australian conglomerate is exiting British DIY and spinning off supermarkets. Newish boss Rob Scott is wary about future dealmaking. That is encouraging for shareholders: it makes more sense for now to work existing businesses harder and return more cash.

The Exchange: A Down Under take on Trump

6 June 2018

Former Australia Prime Minister Kevin Rudd gives the U.S. president some credit for his dealings with North Korea’s Kim Jong Un. But he explains that Donald Trump’s protectionism has enraged China’s leaders and may play into the hands of the country’s own nationalists.

Aussie cartel case bodes ill for equity bankers

5 June 2018

Citi, Deutsche and client ANZ are about to face criminal charges over how they handled leftover stock in a 2015 share sale. That’s a harsh response to common underwriting practice, with no warning. But regulators seem confident - and their success could inspire foreign peers.

Red-faced Wesfarmers walks away from UK botch job

25 May 2018

The Australian DIY giant has offloaded its Homebase subsidiary to management. It racked up losses of almost a billion pounds in two years of disastrous tinkering with the previously profitable business. At least the company has now accepted it doesn’t understand the market.

Rio Tinto can ease out of Indonesian mine mess

23 May 2018

The Anglo-Australian group may be ready to accept $3.5 bln for its interest in Freeport-McMoRan's Grasberg copper operation. The offer is hardly full, but a deal would save on costs and frustration. It also should make it easier for both companies to extract from a tough spot.

Santos gambles on crude with $11 bln bid rebuff

23 May 2018

The Australian gas group rejected the last in a string of approaches from private equity-backed Harbour Energy. New Chairman Keith Spence is optimistically betting energy prices will stay high. Given the industry’s volatility, this could come to look like a missed opportunity.

Santos suitor clears one of three major hurdles

15 May 2018

China's ENN and Hony Capital, top owners of the $10 bln Australian oil and gas producer, have aligned themselves with bidder Harbour Energy. That's vital support for the private-equity-backed group. A rising oil price is a remaining complication, and government approval another.

China offers miracle cure for Aussie cancer unit

7 May 2018

Beijing-based buyout firm CDH Investments is offering $1.4 bln for Sirtex, the liver cancer specialist. The non-binding bid is a 20 pct uplift on an agreed deal with U.S. suitor Varian. The rich valuation upsets the logic that a strategic buyer can pay more than a financial one.

Australian banks are down but not out

3 May 2018

A string of inquiries and painful revelations is buffeting ANZ, CBA, NAB and Westpac – the most recent about lost details on 20 mln accounts at CBA. As ANZ’s boss says, a golden era is over. But though costs are rising and loan growth is set to slow, the oligopoly will endure.

Australian hospitals operator given LBO lifeline

27 April 2018

An unwanted $3.1 bln offer values Healthscope only a bit higher than its 2014 IPO price. The deal is also being led by the same buyout executive who bought and sold the company for TPG. Healthy skepticism is warranted, but there's a chance to be discharged without further injury.

Wesfarmers exposes its conglomerate discount

24 April 2018

By opting to spin off Coles Supermarkets, the $35 bln Australian group invites scrutiny of its coal-to-clothes hodgepodge. A Breakingviews analysis suggests a gap of 11 pct between its market value and the sum of its parts. It's enough to spur a fresh strategic review.

First blood won’t be last in Aussie bank showdown

20 April 2018

The boss of wealth manager AMP quit Friday, as a public inquiry into the financial sector Down Under heats up. The Royal Commission has heard horror stories about lies, dud advice, and lenders charging the dead. Craig Meller’s scalp may not be the only one hung on the gate.

Carlyle uncorks a fine Australian wine deal

6 April 2018

The private equity firm is acquiring Accolade, maker of Hardys and other brands, for A$1 bln. Asian demand should leave ample room for growth. Higher Chinese tariffs on U.S. wine also could help. And a cheap valuation compared to rival Treasury makes it a buyout worth toasting.

Coal clearout puts Rio on path to greener deals

28 March 2018

The Anglo-Australian miner has raised $4.2 bln this month getting out of coal. That implies more buybacks and fewer environmental concerns, helping lift Rio Tinto’s modest valuation. It can also focus on future growth, including investments in battery ingredients like lithium.