Chicago toll road owners may avoid highway to hell 21 Jul 2015 Macquarie and Ferrovial are shopping the fee-charging U.S. turnpike, a decade after buying it for $1.8 bln. The high debt and low earnings mean it’ll take a big valuation multiple to recoup the investment. Recent infrastructure deals suggest they could get one.
Brookfield can sail off with Asciano 2 Jul 2015 The Canadian investor wants to buy the Australian ports and rail operator for $6.8 bln. A solid 36 percent premium was enough to get Asciano’s board talking. So shareholders seeking a big sweetener may be disappointed. Part-payment in shares could be the main obstacle.
Mongols and miners bow to market reality 19 May 2015 Rio Tinto and Mongolia have ended a two-year stand-off on the giant Oyu Tolgoi mine by both giving ground. The nomad state now has a fix for plummeting investment inflows. While the miner’s hand looks stronger, falling metals prices have made civility the better part of valour.
Australian bank crisis-proofing takes toll on NAB 7 May 2015 The lender is bracing for higher capital demands by raising $4.4 bln from investors. With valuations still high despite a slowing home market, rivals may follow. Reinforcing a healthy sector is prudent. For shareholders, though, the era of supercharged returns is ending.
BHP takes no chances with South32 spinoff 17 Mar 2015 The new mid-sized miner will emerge with comparatively little debt. While BHP Billiton is spinning off unloved assets, South32’s balance sheet will be strong enough to allow new investment. The low gearing could also make it an attractive takeover target for a debt-funded bidder.
GE’s crumbs make for Australian buyout feast 16 Mar 2015 The U.S. conglomerate is offloading its consumer lending arm down under in one of the country’s biggest private equity transactions. Yet the $6.3 billion deal shrinks GE Capital’s balance sheet by just over 1 percent. The group has far to go to reduce its dependence on finance.
U.S. toll road investor dodges predecessors’ ditch 12 Mar 2015 Australia’s IFM will pay $5.7 bln for a bankrupt Indiana turnpike operator, 50 pct more than Macquarie and a Spanish partner shelled out in 2006. Less than half the amount is debt, though, and the road is in far better shape. That should help the firm steer clear of any potholes.
Austria finds apt target for landmark bank bail-in 2 Mar 2015 Vienna is to hit creditors in the remnants of Hypo Alpe Adria, after finding a capital hole of up to 7.6 bln euros. Unlike the recent bail-in of Portugal’s BES, senior bondholders get haircut too. EU reforms to protect taxpayers from banks are being used on deserving candidates.
Australia’s property market joins closed-door club 26 Feb 2015 The government plans to charge fees to foreign buyers and enforce restrictions on sales of existing homes. After Hong Kong and Singapore, another hot real estate market is cooling to Chinese money. It adds to the political pressure on other countries to become less welcoming.
Japan Post pays $5.1bln for global expansion stamp 18 Feb 2015 The giant postal operator has offered a 49 percent premium for Australia’s Toll Holdings, despite few obvious synergies. The acquisition delivers Japan Post an international strategy ahead of its upcoming IPO. More deals will follow as Asia’s logistics industry consolidates.
Australia underscores urgency of Asian rate cuts 3 Feb 2015 The Reserve Bank’s quarter-point cut, which traders dismissed as a remote possibility just days ago, shows how vital monetary easing has become across the region. From Sydney to Singapore to Seoul, policymakers risk falling behind the curve and hurting investment and growth.
Shopping mall merger adds low rates to M&A toolkit 3 Feb 2015 Australia’s Federation Centres is buying larger local rival Novion Property Group for $6.1 billion. Cost savings don’t fully justify the tie-up. But the two will also reduce expenses by refinancing their debt. As rates head south, it’s a rationale that others may adopt.
Cheaper oil no friend to Asia’s households 24 Dec 2014 Real wages are growing 2 percentage points below their long-term average, reflecting labour’s weak bargaining power amidst slowing growth. Falling oil prices and low inflation could prompt employers to be even more tight-fisted in 2015. Household finances might wobble.
BG’s $5bln sale bodes well for Aussie M&A pipeline 10 Dec 2014 The British energy group is selling its Australian gas transmission conduit to APA for a higher price than expected. It’s another example of infrastructure assets fetching rich valuations. Amid red-hot investor demand, 2015 promises to be another bumper year for deals down under.
Australia joins global race to top on bank capital 8 Dec 2014 A government-backed inquiry thinks capital ratios should be in the top quartile of international peers. Given time, Australia’s big banks can get there without issuing equity. Even though they avoided the crisis, lenders cannot evade the worldwide push for higher standards.
Australian bank chief picks good moment to bow out 13 Nov 2014 Gail Kelly will retire from Westpac after seven years in charge. Half the country’s big four banks have changed CEOs this year. The industry is in good shape. But a slowing domestic economy and the threat of more intrusive regulation mean incoming leaders face a tougher task.
UK upturn offers NAB escape from banking purgatory 30 Oct 2014 The Australian lender plans to offload its Clydesdale unit after years of disappointing results. The improving British economy makes that a possibility. Even then, NAB needs stock markets – or prospective buyers – to play ball. And it will remain on the hook for past misconduct.
Mega Medibank IPO sets tone for Aussie sell-off 23 Oct 2014 A valuation of up to $4.8 bln for the state-owned private health insurer rests on the potential for cutting costs. But not being too greedy now will make it easier to flog some of the huge pipeline of Australian assets lined up for privatisation to stock market investors.
Ferrovial is back in conquistador mode 22 Oct 2014 The Spanish group is chasing deals worth 1.8 bln euros in three countries including Australia. The spree echoes its 2006 pursuit of airport operator BAA, which nearly dragged it down. But these acquisitions look less risky. Thanks to savvy sales, Ferrovial has cash to spend.
China coal tariffs blacken Aussie free trade talks 14 Oct 2014 Import taxes will help China to protect its ailing domestic producers from a glut of cheap foreign supply. Yet raising the defences makes it even harder for Australia, a top exporter, to present a long-awaited agreement with its top trading partner as evenly balanced.