Viewsroom: China’s Afghanistan question 19 Aug 2021 Beijing was able to expand its influence in central Asia while America and its allies held back the Taliban. The Islamic fundamentalists’ return to power presents China with new challenges – and opportunities. Plus: CEO Mike Henry shakes up mining giant BHP.
Woodside deal replaces one dilemma with another 19 Aug 2021 Buying BHP’s oil and gas unit solves two problems: growth and cash flow. A 10% fall in Woodside’s shares, however, suggests missing details on valuation, well closure costs and climate risk are worrisome. And yet voting against the transaction could leave the company worse off.
BHP’s Brexit should fare better than Unilever’s 18 Aug 2021 The $170 bln miner’s decision to collapse its dual-listed structure will require UK investors to swap their shares for foreign ones. When the Anglo-Dutch consumer group tried that in 2018, investors kicked up a fuss. The value proposition of BHP’s gambit looks more enticing.
Intel offers pointers to ease U.S. water crises 17 Aug 2021 A federal agency is for the first time slashing how much the Colorado River supplies to some states. Climate change means the problem may in time affect California. The chip giant’s efforts to save water in Arizona show how business can help mitigate problems caused by aridity.
BHP boss goes a seismic three for three 17 Aug 2021 After paying a record dividend on the back of soaring iron ore, Mike Henry is boldly remaking the $178 bln miner. He’s selling oil and gas, charging into potash and collapsing the dual-listed structure. Even with fresh questions on capital use, a valuation uplift looks warranted.
BHP climate parcel pass would oil buyer’s regret 16 Aug 2021 The miner is in talks to sell its petroleum unit to Woodside for a mooted $15 bln. It’s a decent price for the seller, and cost cuts would make it stack up for the bidder. But there’s a big risk these assets are sharply devalued on carbon concerns sooner rather than later.
Aussie coal bailout begins with fair share of pain 13 Aug 2021 Power producer AGL’s CEO says everyone should pitch in to wean the country off the black stuff. Fair, but it also sounds like a pitch for taxpayer aid from a company that dug itself into a hole. A credible plan would ensure shareholders and executives bear the brunt.
Aussie lender’s largesse is borderline justifiable 11 Aug 2021 Commonwealth Bank is hiking its dividend and buying back a record A$6 bln in stock. Yet expenses are growing faster than revenue, and almost all of its 20% profit jump was due to fewer bad loans, a trend which may reverse. Even so, it still has deep enough pockets to be generous.
Australian economy proves hard to wreck 10 Aug 2021 Fresh lockdowns are exposing Prime Minister Scott Morrison’s botched vaccine efforts. And yet business is upbeat, asset prices are rising and the central bank will curb support. Mounting fiscal and demographic costs have yet to faze a country conditioned to believe in miracles.
Viewsroom: Jack Dorsey takes a trip Down Under 5 Aug 2021 Square’s $29 bln takeover of Aussie fintech darling Afterpay shines a light on the “buy now, pay later” craze, which poses a big challenge to many established players in the banking and payments businesses, argue Melbourne-based editors Jeff Goldfarb and Antony Currie.
Klarna’s list of suitors may not be that extensive 4 Aug 2021 Following the $29 bln swoop on Afterpay by Jack Dorsey’s Square, its $46 bln Swedish instalment-payment rival could be in play. Yet Klarna is pricey, not a pure pay-later player, and might not sell to a credit card giant. Stripe and PayPal look the most likely bidders.
Aussie takeover refuseniks toss hitchhiker’s guide 4 Aug 2021 Sydney Airport, Iress and Altium all spurned bids with a 42% premium, the famed sci-fi number that answers the ultimate question of life. Playing hard to get, as target Spark has done, is part of the M&A game. Hubris, however, has a way of leading to remorse in the deal universe.
Afterpay’s $29 bln Square deal taps new reality 2 Aug 2021 The instalment-payments darling has defied naysayers for years but faces fresh competition from PayPal and Apple. An all-stock takeover by Jack Dorsey’s fintech outfit comes at a discount to a recent valuation peak. Selling now, though, provides a better chance of success later.
Rio Tinto CEO picks cash shower over kitchen sink 28 Jul 2021 Jakob Stausholm is spraying the miner’s shareholders with a hardy $9.1 bln in dividends after his first six months in the job. There’s also plenty to splash out on projects like Serbian lithium. Despite the mopping up required in ESG and beyond, the financial plumbing is sound.
Tesla comes of age at just the right time 26 Jul 2021 Elon Musk’s carmaker charged past $1 bln in quarterly profit for the first time. Margins finally rival leaders like Toyota. It’s yet to mature into its $620 bln valuation. But growing pains at Lucid and other upstarts make Tesla’s push to validate its price look less fanciful.
BHP’s oil exit would be better sooner than later 21 Jul 2021 The mega-miner is reported to be mulling a $15 bln sale of its petroleum arm. The subsidiary’s status as a profit engine amid rising energy prices makes it a tough decision. But even if done at a knock-down rate, CEO Mike Henry can burnish BHP’s allure with oil-hating investors.
Aussie oil deal drills into some messy territory 21 Jul 2021 Embattled Oil Search rejected a $6.5 bln offer from rival Santos. A merger would help clear up the target’s poor governance and improve the bidder’s balance sheet. And yet a takeover looks a financial stretch for Santos and could devolve into a value-destructive bidding war.
UK healthcare M&A revolt leaves sickly prognosis 20 Jul 2021 Investors in hospital operator Spire blocked a $1.4 bln takeover by an Australian rival, in the latest sign of pushback to takeovers. Yet reaching a similar value on its own looks tricky given lingering virus effects. Tensions with rebel shareholders are an added complication.
Sydney Airport becomes Covid-19 rebound hub 15 Jul 2021 It rejected a $17 bln takeover proposal despite the hefty premium on offer. The airport operator reckons it can land post-pandemic value unaided. Any bid sweetener would require an even rosier view of travel, turning the deal into a stark proxy for fuzzy recovery prospects.
Sydney airport bid needs high-flying guesstimates 5 Jul 2021 Shares took off after infrastructure funds offered $17 bln for Australia’s top aviation hub just after the hermit country halved its arrivals quota. The 42% premium is still below pre-pandemic prices. Even if travel resumes, the opportunistic bid rests on blue-sky thinking.