PRESS DIGEST-Australian Business News - May 16

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)

Seven Network (SEV.AX) chairman Kerry Stokes has spent more than A$40 million this week raising from 53.7 percent to 65.3 percent his stake in equipment hire company National Hire (NHR.AX). Analysts welcomed the move, agreeing that the environment for non-residential construction spending was buoyant following announcements in this week's federal budget that at least A$20 billion will be spent nationally on roads, railways, ports and other infrastructure projects. The mining boom is also fuelling demand for equipment hire. Page 56.

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Melbourne-based Indophil Resources (IRN.AX) has rejected a A$426 million takeover bid from Xstrata (XTA.L), arguing that it is "low ball and unrealistic". Swiss miner Xstrata denied this, saying the offer, which it wants to use as a means of increasing its interest in the Tampakan copper and gold project in the southern Philippines joint owned with Indopohil, represents fair value. Xstrata said the mine still had significant development, financing, and political risk associated with it, hence the "fair price". Page 57.

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Construction group Leighton Holdings (LEI.AX) yesterday reaffirmed forecasts for full-year earnings growth of more than 30 percent, after announcing net profit of A$375 million for the nine months to March 31. Chief executive Wal King also predicted that revenue would grow by more than 10 percent a year over the next three years, as Leighton struggles to keep pace with a surplus of work in the Middle East and prepares for a surge in government infrastructure spending in Australia. Leighton shares surged to a three-month high on the bullish outlook. Page 58.

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Adelaide Brighton (ABC.AX) has forecast full-year profit growth of nearly 10 percent as infrastructure and engineering projects fuel demand for construction materials. Chief executive Mark Chellew predicted cement demand would grow by 5 percent this year, up from previous forecasts of 3 percent. He told shareholders that demand in Queensland, Victoria and South Australia was offsetting continuing weakness in the New South Wales building market. Net profit for 2007-08 is expected to be between A$118 million and A$125 million. Page 58.

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

Commonwealth Bank of Australia (CBA.AX) has declined to reaffirm an earlier statement that earnings growth will match or exceed the average of its peers over the medium to short term. Deutsche Bank analyst Ross Brown said this implied CBA "no longer believes it can outperform its peer group," but a CBA spokesman said the bank would not be giving guidance after the backlash suffered by St George Bank SGB.AX when it downgraded its projection of 10 percent earnings-per-share growth to 8-10 percent growth. Page 21.

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Coca-Cola Amatil (CCL.AX) has forecast "high single-digit" growth in net profit this financial year, with most of the boost being provided by its premium beer business. The drinks bottler's shares rose 6 percent, or 45 cents, yesterday to A$8.40 on the news, their biggest gain in almost four months. Chief executive Terry Davis made the forecast at the company's annual general meeting, at a time of softening consumer sentiment and an unexpected 70 percent rise in taxes on pre-mixed alcoholic drinks. Page 21.

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Speculation that AMP (AMP.AX) is considering a bid for St George Bank, Australia's fifth-largest bank, mounted yesterday when AMP chief executive Craig Dunn refused to rule 'anything in or out'. AMP's banking arm is relatively small, possessing about 1 percent of the national mortgage market. Westpac Banking Corporation (WBC.AX) proposed an A$19 billion friendly takeover of St George earlier this week. Page 21.