Australia

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.

James Packer’s exit deals Crown a better hand

21 March 2018

The Australian billionaire has resigned from the board of his casino empire again, this time for health reasons. He leaves a group still reeling from a Chinese crackdown that left staff in prison and prompted a costly global retreat. The path to recovery is clearer without him.

Wesfarmers supermarket spinoff is a good start

16 March 2018

The sprawling A$50 bln Australian conglomerate plans to list Coles separately and under a new boss. Pushing out the slow-growth, capital-draining company should make Wesfarmers more appealing to investors. A broader carve-up including Britain's Homebase would also make sense.

Activist spat leaves Aussie chain in bargain bin

1 March 2018

Aggressive investors can benefit other shareholders but maybe not at Myer. Solomon Lew's Premier Investments slams the retailer’s board but offers only generic fixes, while he also has conflicts of interest. Sadly, there are no easy levers anyone can pull to boost value here.

Miners face a multibillion-dollar growth debate

28 February 2018

The big diggers have emerged from 2017 in rude health: BHP, Rio and Glencore's combined net debt is down to a third of where they ended 2013. The challenge is how to go beyond better payouts. Geology and high prices mean the next phase of growth may be unorthodox.

Qantas can ride an Australian recovery

22 February 2018

The flag carrier has pulled away from regional rivals, with impressive cash generation and record pre-tax profit. Shares are up 70 percent from early 2017, and it is renewing its fleet. Still, higher oil prices and any extra domestic competition could yet mean turbulence.

Westfield’s $15 bln sale is dangerously discounted

22 February 2018

The takeover premium is down to just 5 pct of the mall operator's undisturbed price. Unibail-Rodamco shares, being used as currency, have tumbled and the cash component is worth less because of exchange rates. That leaves the deal vulnerable to huffy investors who may want more.

Glencore is a weather vane for mining M&A

21 February 2018

The Swiss commodity group’s once-swollen net debt is below cash flow, but it will only decide later this year whether to hike dividends further. That leaves CEO Ivan Glasenberg scope to look for deals. If Glencore can’t find any decent ones, its peers probably won’t either.

Revived Santos can turn from prey to predator

21 February 2018

Full-year results show the $9 bln Australian gas producer is on the mend, with a narrowing net loss, less debt and more cash. That vindicates last year’s rejection of an opportunistic bid. The next challenge is shifting focus to growth - which could send Santos hunting for deals.

BHP’s good news visible despite coal smudge

20 February 2018

Production woes and other setbacks took the shine off $4.1 bln of first-half earnings at the world's largest miner. Yet BHP still offers investors high returns on capital, a solid balance sheet and cash from likely selloffs. Plus a pushy investor is keeping management focused.

Macquarie takes bold dive into Danish telecoms

12 February 2018

Teaming up with local pension funds to buy TDC for $6.7 bln is a bet on ultra-fast broadband. It’ll be hard to cut costs at the former private equity-owned firm. Stiff competition for infrastructure assets is forcing the Aussie bank to take risks. Financial engineering may help.

TDC has narrow bandwidth for takeover defence

8 February 2018

Denmark’s biggest telco rebuffed a $6 bln approach from a buyout group including local pension funds and Macquarie. The infrastructure-focused consortium’s logic is odd: TDC has been through private equity ownership, and is moving into media. But the chunky premium may be enough.

Rio Tinto is due to unearth new growth ideas

7 February 2018

The $100 bln miner's latest results reveal a company cranking on all cylinders. Decade-high profitability led to nearly $10 bln in dividends and buybacks last year. Before long, though, investors may want boss Jean-Sébastien Jacques to find some other smart uses for the money.

Elliott’s fresh attack on BHP misses its target

7 February 2018

The activist fund has been nipping at the heels of the world's largest miner for months. Now it argues that unifying listings in London and Sydney could mean a $22 billion boost. It’s a lot of distraction and cost for an unproven gain. Simplicity is unlikely to be so lucrative.

Ola puts SoftBank in back seat with overseas drive

5 February 2018

The Indian ride-hailing outfit wants a slice of the action in Australia. The intrusion into one of Uber’s strongholds will irk SoftBank, which is a big investor in both firms. The Japanese group’s minority stakes clearly are not enough to stop fights between taxi startups.

Australia’s CBA makes a brazen CEO choice

29 January 2018

The country’s top lender picked retail head Matt Comyn as chief, despite a money-laundering scandal in his unit. Investors seem sanguine and CBA’s board argues the bank would be hard for an outsider to master quickly. Even so, the lack of accountability is disappointing.

Mega-miners will find good things in small packages

27 December 2017

They still depend on moving tonnes cheaply. But with green energy changing demand, big producers must increasingly think like small ones. For companies like Rio Tinto and BHP that will require a change of mindset – and in some cases, leadership.

Pushy investors on board for 2018 Pacific cruise

22 December 2017

Campaigns at BHP and Myer could set the stage for a pick-up in Australian shareholder activism. Sydney offers enticing targets, shareholder-friendly rules and potentially supportive institutional owners. Expect to see more governance skirmishes Down Under in the coming year.