Australia

Crown Resorts disabused of gambler’s conceit

22 October 2020

A protest vote by shareholders has belatedly targeted the $4 bln casino operator’s cosy and inexperienced board. At least it’s forcing the Australian company to concede a shakeup is needed to clean up its mess. It’s a good reminder about why the right sorts of directors matter.

Australian recovery gets down to business

7 October 2020

Prime Minister Scott Morrison’s government will let companies immediately write off depreciable assets and provide incentives to hire young workers. This next phase of stimulus puts the private sector on the hook to invest in a way that justifies doubling public debt to A$1 trln.

Aussie gold miners make deal wishes come true

6 October 2020

Northern Star is acquiring smaller rival Saracen for $4.1 bln. They’ll share a heap of promised synergies without a premium to pay for using a structure touted by an industry shareholder group. The buyer’s track record also should mitigate some typical merger concerns.

Rio Tinto gets bad recruitment steer from Canberra

15 September 2020

Australia’s treasurer wants the miner’s next CEO to be Australian, after Frenchman J-S Jacques stepped down over the destruction of an Aboriginal site. Cultural sensitivity is a priority, but the goal can be achieved in other ways. Shareholders deserve the best boss Rio can find.

Rio Tinto rebellion sets new ESG bar

11 September 2020

CEO J-S Jacques and two deputies will step down after an outcry over the miner's destruction of Aboriginal heritage sites. Aussie shareholders led a charge that may inspire other socially conscious investors. Bosses and boards hiding behind strong returns have been given notice.

Rio Tinto board can choose CEO – at expense of ESG

10 September 2020

Many shareholders want harsher punishments for the mining giant’s destruction of Aboriginal heritage sites. Robust returns are one reason to stop short of axing boss Jean-Sebastien Jacques. If he stays, though, Rio’s responsible investing credentials will be deeply discounted.

Fintech payment pioneers face war on two fronts

3 September 2020

Afterpay’s shares fell 10% after PayPal said it would offer a “buy now pay later” product. Unlike the Australian group, the U.S. money transfer giant is giving its version for free. Competition will aggravate the regulatory risk Afterpay and Swedish rival Klarna already face.

Aussie finance scandal offers universal truths

3 September 2020

Storied wealth management giant AMP put itself on the block days after Chairman David Murray quit over the promotion of an executive accused of sexual harassment. The firm has been lurching from problem to problem for years. Fixing culture and regaining trust is hard to do.

BHP selfishly brushes up green credentials

18 August 2020

Surging iron ore sales cushioned declines in other commodities as annual earnings fell 4% to $9 bln. Boss Mike Henry plans to ditch some high-polluting energy assets, albeit for economic, not environmental, motives. Regardless, a cleaner portfolio makes business sense.

China’s economic recovery looks squiggle-shaped

30 July 2020

Budweiser, KFC and Rio Tinto point to reviving sales in beer, fried chicken and steel. Industrial profit is up too. But the rebound is unevenly distributed across sectors and regions, and employers are still shedding jobs. As pent-up demand is sated, the optimism might fade.

Crisis forces Australia and China closer

21 July 2020

Despite diplomatic tension, miners BHP and Rio are cashing in on Beijing's infrastructure stimulus. Supply disruptions in Brazil and weak global demand have left the two trading partners even more dependent on each other. Politics can’t change facts under the ground.

Qantas charts choppy path for Bain’s Aussie flight

26 June 2020

The U.S. buyout shop beat out rival bids for bankrupt Virgin Australia. There’s haggling to do with creditors and others before the sums are known. At the same time, Qantas is raising $940 mln and plans to axe 20% of its workforce in a fresh sign of the brutal challenges ahead.

Virgin Australia suitors strain to soar like TPG

22 June 2020

Buyout shop Bain and hedgie Cyrus are jostling to buy the carrier out of bankruptcy. The industry has foiled everyone from Warren Buffett to Gordon Gekko. David Bonderman’s TPG is one of the few with happy tales to tell. Replicating its success will require some fancy flying.

Stimulus blunder Down Under sends Big Data alert

25 May 2020

Australia overfunded an $85 bln wage subsidy programme due to excessively pessimistic epidemic models and data entry errors. Canberra thought 6.5 mln workers needed help, nearly twice the real number. Others will find it similarly difficult to cut through the noise.

Sino-Australian DNA sequenced by virus-test deal

11 May 2020

Fortescue’s chairman helped broker a controversial Canberra purchase of 10 mln Covid-19 kits from Chinese genomics giant BGI. It adds to diplomatic tensions over Huawei and the pandemic’s origins. And yet over $150 bln of bilateral trade probably will endure, and maybe even grow.

Corona Capital: SPAC reversal, Italy, Toilet paper

8 May 2020

Concise views on the pandemic’s corporate and financial fallout: Dan Loeb’s blank-check company tries to nix a deal; Italians warily get back to work; Australian TP panic subsides.

Cards played well in three-handed casino deal

29 April 2020

Blackstone is buying 10% of Australia’s Crown Resorts from Lawrence Ho’s Melco. The buyout shop antes up at a discount while the Macau operator sensibly folds a busted bet. And amid a crisis, Crown gets staked by a shrewd backer. It may take time, though, for the pot to grow.

Australia Inc reruns its crisis capital playbook

27 April 2020

Lender NAB will raise $2.2 bln in the biggest local equity issuance since the pandemic began. Just as in 2008, the country is weathering the disruption better than most. Companies Down Under are shrewdly restocking coffers, but often at the expense of retail investors.

Virgin Australia could struggle to regain altitude

21 April 2020

The carrier has gone into administration with over $3 bln of debt after a bailout failed to materialise. Australia is loath to leave Qantas a monopoly, which should help spur a solution, maybe with local pension funds. Remaking Virgin into a success is a different story, though.

Spurned Caltex can do some refining on its own

21 April 2020

Canada’s Couche-Tard abandoned its $5.5 bln plan to buy and break up the petrol station operator because of the pandemic. The Australian company’s mooted property spinoff looks like a poor consolation prize. It would make more sense just to proceed with the suitor’s blueprint.