PRESS DIGEST-Australian Business News - April 30

Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.

THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

Lachlan Murdoch has bought a 9.1 percent stake in regional television and radio company Prime Media Group (PRT.AX) for around A$16 million through his company Illyria. Mr Murdoch acquired the stake during Prime's A$110 million capital raising, completed this week. Mr Murdoch was part of a failed attempt to take control of James Packer's Consolidated Media Holdings (CMJ.AX) in 2007, and is believed to have considered a number of other Australian media assets since then. Page 15.

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Dairy products producer Fonterra yesterday announced that it has agreed to sell its Peters ice-cream brand in Western Australia and the Connoisseur ice-cream brand to food company Nestle. Fonterra also said it has sold the licence to produce and market the Cadbury ice-cream brand in Australia to dairy group Bulla. Although Fonterra would not comment on the sale price, analysts estimate the deals will provide Fonterra with between A$35 million and A$45 million. Page 15.

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Queensland toll-road operator BrisConnections is under pressure from its underwriters to pursue investors who have defaulted on the instalment payments due on the company's units yesterday, according to analysts. BrisConnections is to send out a notice to defaulting investors today, and will inform underwriters Macquarie Holdings (MQG.AX) and Deutsche Bank of the extent of the shortfall on Monday. Up to 70 percent of the register is thought to have defaulted on the payments, including rebel investor Nicholas Bolton. Page 15.

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Gaming group Centrebet CIL.AX yesterday said it expects full-year net profit to the end of June to be between A$7.5 million and A$8.5 million, down from last year's result of A$13 million. The company said new fees charged by state racing authorities had cut A$1.4 million from profits, while revenues from on-course bookmaking have fallen 33 percent as customers move to online accounts. Centrebet said it is undertaking a cost-cutting program aimed at saving A$2 million, including the loss of 34 jobs. Page 15.

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THE AUSTRALIAN (www.theaustralian.news.com.au)

David Clarke has stepped down as a director of financial services group AMP (AMP.AX), the second to do so within a week. Mr Clarke announced his surprise decision yesterday, saying that his former role as chief executive of collapsed Allco Finance Group may cause uncertainty among [AMP] shareholders. Mr Clarke's resignation came on the eve of a report by consultants RiskMetrics which recommends that shareholders oppose Mr Clarke's re-election at the company's annual meeting on May 14. Page 17.

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Brewer Lion Nathan LNN.AX yesterday agreed to a A$3.5 billion takeover by its major stakeholder, Japan's Kirin Holdings (2503.T). The A$12.22-a-share deal, which includes a A72 cents fully franked cash dividend, values Lion at A$6.5 billion. Analysts believe that the deal is unlikely to be opposed by Lion's institutional shareholders or bettered by a counter offer. Lion chairman Geoff Ricketts said that the brewer's major brands, such as Tooheys and XXXX beers, would remain Australian icons. Page 17.

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Victorian gas explorer Karoon Gas (KAR.AX) yesterday announced a large gas find at its Poseidon-1 well in West Australia's Browse Basin. The gas explorer said that the exploration well, which is co-owned by global energy company ConocoPhillips, is targeting 5 to 10 trillion cubic feet of gas, with drilling yet to penetrate beyond the lowermost sand interval. Karoon's share price surged 42 percent on the news to a record high of A$5.40, giving it a market value of A$735 million. Page 19.

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Investment fund Babcock & Brown Capital (BCM) has separated from its parent company, collapsed investment bank Babcock & Brown (B&B), after 96 percent of its shareholders voted in favour of the move. BCM is to pay B&B A$5 million in a break fee, and is to be renamed circom Holdings. However, shareholders voted against a board proposal to pay its new chief executive, Andrew Day, a termination payment consisting of 1.5 million shares and a cash lump sum, if he leaves within two years. Page 19.

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THE SYDNEY MORNING HERALD (www.smh.com.au)

Australia and New Zealand Banking Group (ANZ.AX) announced first-half results yesterday, with cash profit of A$954 million for the six months to the end of March, down from the previous year's result of A$1.67 billion. Bad debts during the period were worse than analyst expectations, doubling to A$1.43 billion. Chief executive Mike Smith warned that bad debt costs are expected to be even higher in the second-half, saying the slow grind of rising provisions is now well underway. Page 23.

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Investment fund Babcock & Brown Infrastructure (BBI) BBI.AX yesterday announced an extension to the planned settlement date for the sale of a third of its European ports, terminal and stevedoring business, Euroports. The deal, which will see BBI issue stock to two investors, has been under way since late December and is now due to be completed by June 30. Analysts say BBI is eager to have the deal finalised in order to reduce its A$9.6 billion of debt. Page 24.

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Shares in two of Australia's major airlines, Qantas Airways (QAN.AX) and Virgin Blue VBA.AX, rose yesterday following two days of falls related to fears over the impact of the swine flu outbreak. Qantas shares gained A6.5 cents to finish at A$1.94, while Virgin Blue's share price added A0.5 cents to end on A27 cents. Royal Bank of Scotland analysts said that a similar reaction happened after the SARS outbreak in 2003, where a sharp decline in airline shares was quickly followed by a sudden recovery. Page 24.

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THE AGE (www.theage.com.au)

Iron ore mining company Fortescue Metals Group (FMG.AX) yesterday released its March-quarter production results, reporting shipments of 6.1 million tonnes, with earnings before interest and tax of US$63 million, a 66 percent reduction from the previous quarter. Fortescue also said it now expects full-year production to be 26 million tonnes, a 15 percent decrease from recent guidance. Fortescue said its aim of reaching an annual production rate of 55 million tonnes was now on hold until the market for lump iron recovers. Page B1.

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Mining company OZ Minerals (OZL.AX) yesterday said a review of board and management numbers is currently being undertaken, with substantial cuts expected as part of moves to tackle debt. OZ is currently finalising a deal to sell A$1.97 billion of assets to China's Minmetals and Hong Kong's Sci-Tech Holdings, with investors due to vote on the Minmetals deal on June 12. Speaking at the release of the miner's March-quarter production results, chief financial officer David Lamont said the company was also examining how it will use the A$800 million in cash the company will have after the asset sales. Page B3.

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Aluminium producer Alcoa (AA.N) yesterday announced further cuts to production at its Portland aluminium smelter in Victoria. Combined with earlier cuts, production at Portland will be 15 percent lower from July. Alcoa said the Federal Government's Carbon Pollution Reduction Scheme was a factor in the decision, but conceded that falling prices for aluminium had also contributed. The company said it is aiming to reduce costs by between 10 percent and 15 percent by the end of 2009. Page B3. --