PRESS DIGEST-Australian Business News - Jan 11

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)

--The owner of the Sheridan, Dunlop and Bonds brands, Pacific Brands has refused to give Kohlberg Kravis Roberts exclusivity in negotiations over a possible takeover. The move allows for other suitors to submit competing bids to the private equity group's offer. Craig Woolford at financial conglomerate Citigroup yesterday said Pacific Brands was a "classic private equity target" due to its high generation of cash and minimal capital expenditure requirements. Page 15.

--Analysts have warned that private equity group Kohlberg Kravis Roberts' offer for clothing wholesaler Pacific Brands is unlikely to spark bids for other underperforming retailers. Unlike other retail stocks, only 10 percent of Pacific Brands' sales are direct to consumers. "Something like Pacific Brands has less of a direct internet risk, compared with a retailer with a large number of store leases," Jacqueline Fernley, analyst at investment manager Wilson HTM, said. Page 15.

--Graham Mackay, chief executive of brewer SABMiller , will visit Melbourne next week to meet the core staff and customers of its recently acquired Foster's Group ahead of the integration of the Victoria Bitter manufacturer into its worldwide operations. The trip comes after statistics from research group Nielsen showed that local beer consumption in November fell by 5 percent. Page 33.

--Tim Cooper, managing director of brewer Coopers Brewery, yesterday revealed that sales for the second half of last year were down 0.6 percent. Despite a difficult trading environment for brewers, however, Coopers is planning to release a new beer this year to mark the 150th anniversary of the company, which was founded by Dr Cooper's great-great grandfather, Thomas Cooper. Page 33.

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

--Analysts are predicting that the Australian stockmarket will become a hunting ground for private equity funds looking for undervalued companies, after news broke yesterday that Kohlberg Kravis Roberts had made a takeover bid to clothing wholesaler Pacific Brands. "We're putting 2012 down as the year of the takeover," Lew Fellowes from broker Pattersons Securities said. Page 15.

--Shareholders in specialist support firm Spotless Group have suggested holding an extraordinary general meeting if the company's board refuses to engage with Pacific Equity Partners (PEP) over the latter's takeover bid. The private equity firm has submitted a A$2.68 a share offer, but has refused to increase it until Spotless's board grants (PEP) due-diligence access. "I think the shareholders should get some satisfaction that the board is listening to them and the offer is a sensible offer," Brian Blythe, former chief executive of Spotless, said. Page 15.

--Foreign Minister Kevin Rudd yesterday warned Australia's business community that they risked missing a Brazil-scale economic opportunity by not investing in Indonesia, a country he said was embarking on a "radical transformation". "There is a grave danger that corporate Australia misses the boat  there's a grave danger for corporate Australia that this passes us by," Mr Rudd said. Page 15.

--Insurance Australia Group (IAG) yesterday revealed it was anticipating up to A$200 million of new damages claims in the wake of hailstorms in Victoria on Christmas Day. Around 24,000 claims have been filed against the insurer's CGU and Australia Direct businesses. The disasters will push IAG's damages payout bill up to A$420 million, well beyond the A$266 million catastrophe allowance the insurer had established for the second half of last year. Page 15.

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

--The Australian Securities and Investments Commission yesterday banned a second adviser from the Commonwealth Bank of Australia-owned Commonwealth Financial Planning Ltd (CFPL) for failing to meet his professional obligations. The regulator yesterday published a statement saying that any of Simon Langton's former clients should contact CFPL if they believe they are entitled to compensation. Page B15.

--Shelley Musk, chief executive of Qantas Airways' New Zealand subsidiary Jetconnect, yesterday said competition on the trans-Tasman route would "definitely" become more intense due to plans by rival carrier Emirates to increase capacity and Virgin Australia's revenue-sharing alliance with Air New Zealand. "It is going to be tough and I wouldn't see much growth  overall, just of the general dynamic in the economy and the competition," Ms Musk said. Page B15.

--Aluminium refining and bauxite producer Alumina managed to record a A7.5 cent jump in its share price yesterday to close at A$1.17, despite news that Alcoa, its joint-venture partner in the Alcoa World Alumina and Chemicals alliance, had posted a second quarter loss due to a fall in aluminium prices. Alcoa yesterday predicted the worldwide demand of aluminium to grow by 7 percent this year, a forecast that surprised some analysts. Page B16.

--Peter Esho, chief market analyst at contracts for difference provider City Index, yesterday said private equity group Kohlberg Kravis Robert's (KKR) takeover bid for clothing wholesaler Pacific Brands could foreshadow other investments into struggling retailers. "The approach by KKR  will no doubt have a ripple effect on other businesses, which are trading at a discount similar to [Pacific Brands]," Mr Esho said. He nominated Ten Network Holdings, Harvey Norman, Myer and David Jones as potential targets for private equity funds. Page B16.

THE AGE (www.theage.com.au)

--The S&P/ASX 200 Index climbed 46.8 points to finish at 4152.2 points yesterday, with investors buoyed by strong trade from China and positive earnings figures from the United States. Alumina helped lead the market with a 6.9 percent increase to A$1.17, while energy and materials stocks also had a good day on the stockmarket. "If these signs of improved demand translate into better than expected revenue growth for companies, it will become difficult for investors to ignore equities," Ric Spooner from broker CMC Markets said. Page B14.

--Fortis Mining yesterday announced that the vendors of two potash projects in Kazakhstan, which the mineral explorer has staked its future on, had initiated arbitration proceedings in a bid to void their sale agreement with Ji'an Resources. Fortis is attempting to acquire the two ventures through a series of companies listed in Panama, Kazakhstan, the British Virgin Islands and Hong Kong, where Ji'an is based. The corporate regulator recently blocked Fortis from raising A$35 million to help fund the acquisition. Page B17.

--The chief economist at investment bank HSBC, Paul Bloxham, has noted that "housing construction is still in trend decline", despite data published yesterday showing a 8.4 percent increase in building approvals in November. The figure comes after economists forecast a 6 percent rise in approvals, which had fallen to a 33-month low in October. Despite the increase, however, approvals in November were still 18.9 percent lower than the same time a year ago. Page B18.

--The Australian Communications and Media Authority yesterday warned Vodafone Hutchison Australia that it will face legal action in the Federal Court if its dealers continue to ignore the Do Not Call Register. Chris Chapman, chairman of the telecommunications regulator, said the mobile phone operator would abide by an undertaking to audit and report on all telemarketing activities by its dealers. Page B19.