Qantas can ride an Australian recovery 22 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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 Jan 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 Dec 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 Dec 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.
Disney is Death Star for Europe’s telco media fad 14 Dec 2017 The "Star Wars" producer’s acquisition of Fox includes pay-TV business Sky, giving it more firepower and better content. European telecom groups like BT are struggling to justify investment in sports rights and content. Disney’s arrival may force some to make a necessary retreat.
Santa drops coal in Macquarie’s Xmas stocking 14 Dec 2017 The $25 bln takeover of mall operator Westfield propels Goldman Sachs and UBS to the top of Aussie M&A league tables and pushes the local banking champion down to a rare sixth place. There is at least one gift under Macquarie's tree, though. It may yet retain the fee crown.
Westfield’s $25 bln deal is mere retail therapy 12 Dec 2017 The mall empire led by Australian magnate Frank Lowy is selling itself to European property group Unibail-Rodamco. The combined structure is tangled and merger savings are scant. Given consumer shopping trends, the benefits of getting bigger may have a limited effect.
Zurich Insurance gets a fair dinkum deal from ANZ 12 Dec 2017 The Swiss insurer is buying the Australian bank’s life insurance businesses for $2.1 bln, giving it a big distribution network and positioning it as the largest operator in retail life insurance Down Under. The reasonable price rewards Zurich for helping ANZ streamline.
Australian waste deal may scrap shareholder value 11 Dec 2017 Trash hauler Cleanaway is buying rival Tox Free for about $625 mln, including debt. The deal is prudently funded with equity, and promises sufficient synergies to cover the premium being paid. Unless more savings can be found, though, the high price implies a rubbish return.
Rio Tinto plays it safe with compromise chairman 4 Dec 2017 After a nine-month search, the $90 bln miner picked director Simon Thompson over former Xstrata boss Mick Davis to lead the board. His mining, emerging-market and buyout knowhow should prove useful. A fresh push to squeeze out cash is another sign Rio is keeping risks calculated.
Australia’s Aristocrat makes reckless mobile bet 30 Nov 2017 The $11 bln group's shares slumped on plans to buy online games firm Big Fish for $1 bln. A wobble in tech stocks probably doesn’t help. But the deal looks pricey, Big Fish’s recent performance is weak, and the rationale for uniting slot machines and mobile games is thin.