PRESS DIGEST-Australian Business News - June 9

Tue Jun 8, 2010 5:17pm EDT

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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)

Oil and gas exploration company Karoon Gas (KAR.AX) yesterday announced preliminary plans to float its South American assets, which includes acreage near recent multi-billion-barrel oil discoveries in Brazil and Peru.

Karoon hopes to float 30 percent of its South American operations on the Brazilian stock exchange for up to US$700 million to help fund a drilling program next year. Page 49.

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Mining company BHP Billiton (BHP.AX) yesterday revealed details of a larger-than-expected potash resource at its Jansen project in Canada.

BHP used the announcement to pressure the Federal Government over its proposed resource super profits tax, with a spokesperson saying, "Canada is a stable and supportive investment environment and the all-in tax rate for this project will be globally competitive." Page 50.

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Beverage producer Coca-Cola Amatil (CCL.AX) yesterday acknowledged that it is creating a dairy-based version of its strongly performing energy drink, Mother.

However, the company released a statement stating that "any new product in the Mother energy range will NOT be called Mother's Milk." Last year, energy drinks were the fastest growing category in Australia's beverage market. Page 51.

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John Gillam, managing director of hardware retail group Bunnings (BWP.AX), yesterday welcomed wholesale distributor Metcash's acquisition of a majority stake in Bunnings rival Mitre 10.

Mr Gillam said he expected Mitre 10 to become a more disciplined competitor. Mr Gillam, speaking at the Stockbrokers Association annual conference, also outlined plans for Bunnings continued expansion, including the opening of 10 to 14 new large-format stores each year. Page 51.

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

Following a spate of profit downgrades from local companies - including Toll Holdings (TOL.AX) and Virgin Blue VBA.AX - stockbroking analysts are reassessing their forecasts for earnings growth.

Although earnings growth forecasts among analysts for 2010-11 have centred around 25 percent, those figures are now expected to be reduced by at least a few percentage points due to concerns around the European debt crisis and a possible slowdown in China. Page 25.

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German construction company Bilfinger Berger (GBFG.DE) has renamed its Australian operations Valemus, and yesterday lodged a prospectus for the local group with hopes of raising between A$1.22 billion and A$1.39 billion.

"Clearly, it's going to be a volatile ride in terms of getting that IPO out the door. I think fundamentally, there's nothing wrong with the story, it's a solid contractor," said Fortis Investment fund manager Theo Mass. Page 25.

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Private hospital operator Healthscope HSP.AX yesterday released a statement to the market saying that United States group Tenet Healthcare (THC.N) had withdrawn its takeover offer for Healthscope.

The announcement leaves two private equity consortiums competing for the target, with expectations of a sale price of A$1.8 billion or more.

Healthscope said formal due diligence with the remaining two bidders was progressing. Page 27.

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Jeremy Phillips, the new chief executive of marketing services company Photon Group has asked for a thorough report on the group's books before announcing a profit downgrade and capital raising.

Mr Phillips, who took on the role last week, believes Photon needs to provide the market with accurate accounts and forecasts in order to win back investor confidence.

Photon has undertaken two capital raisings and announced three profit downgrades over the past two years. Page 27.

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

Mining company Xstrata XTA.L has come under pressure to justify its claims relating to job losses and the amount of tax the company pays.

The miner last week claimed it had suspended A$586 million of spending on two projects, putting 3250 jobs in Queensland at risk.

Chief executive Peter Freyberg also said Xstrata paid over 40 percent in tax and royalties, but refused to provide details regarding the claim, citing "company policy." Page 1.

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Qantas Airways (QAN.AX) yesterday announced the sale of its Singapore-based express mail business DPEX Worldwide to freight and logistics group Toll Holdings.

Qantas, which purchased DPEX in May 2007 for S$40 million, would only say that it had made a "small profit" on the sale. The offloading of DPEX has raised speculation that Qantas may also look to sell its stakes in local air freight businesses Star Track Express and Australian Air Express, which have both performed weakly since the economic downturn began. Page 3.

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John Borghetti, the new chief executive of airline Virgin Blue, yesterday said he intended to pursue joint ventures with individual international airlines in preference to airline marketing groups such as Star Alliance and oneworld.

Virgin Blue is currently waiting for regulatory approval for two such alliances, with Air New Zealand and Delta Air Lines.

Analysts say another potential partner could be Singapore Airlines. Page 3.

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The New South Wales Supreme Court has ordered the state government to produce copies of a number of documents relating to the failed Tcard transport smartcard.

The government agency overseeing the contract is attempting to sue the company behind the Tcard, ERG Ltd, for A$77 million. ERG has made a counterclaim of A$215 million over the termination of the Tcard contract in 2008, and was yesterday granted access to the documents. Page 4.

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THE AGE (www.theage.com.au)

National Australia Bank's (NAB.AX) monthly survey of business confidence has found that confidence fell sharply in May as businesses reacted to market volatility, interest rate rises and international sovereign debt fears.

NAB economist John Sharma yesterday said the retail sector was particularly poor, with the number of retailers reporting decreased profits in May exceeding those reporting increased profits by a large margin. Page B2.

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Analysts from investment bank Macquarie Group (MQG.AX) say the Federal Government may agree to place Queensland's prospective liquefied natural gas (LNG) projects under the existing petroleum resource rent tax (PRRT), instead of the proposed resource super profits tax.

Federal Resources Minister Martin Ferguson is believed to have told financial groups last week that applying the PRRT to the projects would "ensure consistency" of treatment of offshore and onshore LNG projects. Page B2.

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Reserve Bank of Australia board member Jillian Broadbent yesterday said that consumer confidence was starting to be affected by a number of issues, including the European debt crisis and the Federal Government's proposed resource super profits tax.

Ms Broadbent said that a fall in confidence in the mining sector "does flow through to lots of parts of the economy." Page B4.

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The chairman of the Federal Government's review of the superannuation system, Jeremy Cooper, yesterday predicted that Australia's superannuation industry would be three times larger within 26 years.

Mr Cooper said that between June 2009 and 2035, the sum managed by the super sector would increase by A$2.1 trillion to A$3.2 trillion.

However, the number of major funds would dwindle from 447 to 74 over the period. Page B4. --

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