PRESS DIGEST-Australian Business News - June 18
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)
Department store Myer yesterday forecast that sales for the six months to the end of June would be 1 percent lower than for the same period last year. The company has cut the inventory it carries by 4 percent, with chief executive Bernie Brookes saying that consumer confidence may take another 18 months to fully recover. Despite the cautious outlook, Myer increased its profit forecast and now expects high single digit profit growth for the year. Page 19.
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The head of iron ore operations for mining company Rio Tinto (RIO.AX), Sam Walsh, will today meet with West Australian Premier Colin Barnett to discuss the proposed iron ore joint venture between Rio and rival BHP Billiton (BHP.AX). Mr Barnett yesterday met with BHP chief executive Marius Kloppers. Although the State Government is unlikely to block the deal, Mr Barnett has said he will demand significant concessions from the companies, such as higher royalties and granting infrastructure access to third parties. Page 19.
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Cinema operators, including Village Roadshow (VRL.AX), Amalgamated Holdings and Hoyts, say they are close to reaching a deal with movie distributors which will digital technology installed in Australian cinemas. The deal will see operators and distributors share the more than A$150 million cost of installing the technology. Distributors will gain most from the move, by no longer needing to send out and replace the perishable 35 millimetre movie prints currently used. Page 22.
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Oil and gas exploration company Drillsearch Energy (DLS.AX) has rejected a A$53 million takeover offer from Beach Petroleum (BPT.AX). The company's description of the offer as inadequate and opportunistic is believed to have angered Beach. However, Beach managing director Reg Nelson yesterday would only say that the company will respond in due course in a dignified and professional manner. Beach, which has a market capitalisation of A$891 million, already holds a 5.2 percent stake in Drillsearch. Page 22.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
The Investment and Financial Services Association, which represents the superannuation and funds management sectors, yesterday anounced moves to phase out commissions on investment products in favour of upfront fees. Analysts say the move should lead to investors receiving higher quality advice, but say upfront fees may also deter small investors from seeking financial advice. Industry sources say the changes should also allow for more accurate comparisons between industry and retail superannuation funds. Page 17.
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Stockbroking firm Berndale Securities has been put up for sale by its owner, United States-based investment bank Merrill Lynch. Berndale is the largest provider of clearing services to the Australian stockbroking industry, and its sale could have a major effect on smaller brokers who use Berndale to clear trades. The Securities and Derivatives Industry Association says that without Berndale, the number of clearers would be reduced by a significant amount. Page 17.
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The board of conglomerate CSR (CSR.AX) yesterday outlined plans to spin off its A$1 billion-plus sugar business. The demerger, which will create the sixth largest sugar business in the world, is expected to be completed by March next year, and may involve an equity raising to support the balance sheets of the two separate companies. Analysts estimate the new company will be worth between A$900 million and A$1.5 billion, and should generate earnings of around A$107 million next year. Page 17. Continued...
