PRESS DIGEST-Australian Business News - May 28

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)

Conglomerate Wesfarmers (WES.AX) yesterday said its A$19 billion purchase of Coles in 2007 may not have gone ahead if the resource super profits tax had then been in place. Chief executive Richard Goyder said the cash generating capacity of the group's Curragh coal mine in 2007 "in many ways enabled Wesfarmers to do Coles." Wesfarmers has called for the Federal Government to raise the return level at which the tax cuts in from 6 percent to 15 percent. Page 44.

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Institutional shareholders in drug manufacturer Sigma Pharmaceuticals (SIP.AX) have called for the company to reject a takeover offer from South Africa's Aspen Pharmacare. Major shareholders have called for Aspen to increase its bid from A60 cents a share to A80 cents a share. Sigma's board is expected to make an announcement regarding the bid in coming days. Page 44.

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Convenience retail chain 7-Eleven Stores has agreed to purchase Exxon Mobil's network of 295 service stations, increasing the number of 7-Eleven fuel retail sites to almost 500. The cost of the deal is believed to be below the A$300 million that oil refiner Caltex had been prepared to pay for the network last year. The Australian Competition and Consumer Commission rejected the Caltex transaction on competition grounds in December. Page 44.

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Michael Luscombe, chief executive of Supermarket chain Woolworths (WOW.AX), yesterday said that the company may have to expand offshore in future if it is to maintain its record of sales growth. Mr Luscombe said that growth for the next five or more years will be delivered by its existing supermarket business and new hardware venture, but added, "going past that, it becomes more challenging." Page 45.

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

Financial services group Citi yesterday released a report claiming that the uncertainty surrounding the Federal Government's proposed resource super profits tax would delay planned expansions at Australian iron ore projects by at least 12 months. The report said this would reduce exports between 2012 and 2014 by 148 million tonnes, worth A$27.6 billion at current spot prices. Page 25.

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Foster's Group's FGL.AX decision to split its beer and wine divisions into two separately listed companies would generate substantial value for shareholders, but would also involve costs of around A$200 million, according to analysts. Goldman Sachs analysts say the value of the two companies would be around A$1.25 higher than Foster's closing price yesterday of A$5.54, driven mainly by a takeover premium for the beer division. Page 25.

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Frank Lowy, chairman of shopping centre owner Westfield Group, yesterday defended his salary and wealth, telling the company's annual meeting "I don't work for nothing…I'm entitled to get paid." Mr Lowy, who was recently named Australia's richest man, said he gave much of his wealth to deserving causes. "I don't think Westfield shareholders are a deserving cause to give them an extra cent," he added. Page 25.

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Mining industry service supplier Ausenco (AAX.AX) yesterday said it expects to post a first-half net loss of between A$9 million and A$13 million. Last year Ausenco reported a net profit of A$12.2 million for the corresponding period. The company said it is currently waiting on the awarding of tenders totalling US$10.9 billion, with decisions due within four to six months. Ausenco's share price yesterday closed 18.21 percent down at A$2.47 a share. Page 26.

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

Liquidators to collapsed financial planning and advice firm Storm Financial have told creditors that a 77-page report was sent to the Australian Securities and Investments Commission last December. The report contained details of suspected breaches of the Corporations Act, including possible criminal charges, involving Storm founder Emmanuel Cassimatis. Page 1.

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Fund management group Perpetual (PPT.AX) yesterday told investors that it expects to record a net profit for 2009-10 of between A$85 million and A$95 million, more than double the previous year's result of A$37.75 million. In his annual letter to shareholders, chairman Robert Savage said, "subject to there being no dramatic deterioration in financial markets," second half results should match those in the first half of the year. Page 2.

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The head of Coca-Cola Amatil's (CCL.AX) alcoholic beverages group, John Murphy, yesterday said the company would not bid for the demerged beer division of Foster's Group. Mr Murphy, who worked at Foster's for 27 years before his recent appointment at Coca-Cola Amatil, said the soft-drink company's alcoholic beverages joint venture with global brewer SABMiller would prefer to grow its own portfolio of beer brands. Page 3.

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Assistant Treasurer Nick Sherry yesterday said Australia's growing Islamic finance sector could help shelter Australia's economy from damage by speculative financial activities. Mr Sherry noted that "the sharia prohibition of betting or gambling means that Islamic banks can use fewer risk-hedging techniques and instruments," which Mr Sherry said had been associated with the growth of "toxic assets" during the global financial crisis. Page 4.

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THE AGE (www.theage.com.au)

The Minerals Council of Australia has commissioned accountancy firm KPMG to prepare two reports to attack the Federal Government's claim that the proposed resource super profits tax would not damage the mining sector. The mining industry is believed to have been angered that modelling by the accountancy firm's economic consultancy, KPMG Econtech, has been used to support the Government's claim that the tax would increase investment in the resource sector. Page B3.

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John Gay, chairman of forestry products group Gunns (GNS.AX), last night resigned from all roles within the company, after resisting investor calls for his removal for a number of months. Major shareholders have been reducing their stakes in Gunns over the past week, causing the company's share price to dive. Mr Gay's departure raises doubts about the future of the company's planned Tasmanian pulp mill, which was seen as a personal project of Mr Gay's. Page B5.

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The Australian Association of National Advertisers yesterday announced that it would review its code of ethics, the first such review for more than a decade. Scott McClellan, chief executive of the association, said the review would seek the views of a wide range of sources. The announcement of the review comes as the Advertising Standards Bureau is preparing to release a study into community views on sex and nudity in advertising. Page B6.

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Newspaper publisher Fairfax Media (FXJ.AX) yesterday said it was developing an application for Apple's iPad, which is released in Australia today. Fairfax will create applications for the Sydney Morning Herald and The Age, which will include all sections of the newspaper. Fairfax has yet to announce details of pricing for the applications, which will be available through the Apple App Store. Page B7.

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