PRESS DIGEST-Australian Business News - June 17

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)

Mining company Rio Tinto (RIO.AX) yesterday launched the prospectus for its US$15.2 billion capital raising. Underwriting fees are expected to total US$456 million, and the miner confirmed it has paid a US$195 million break fee to China's Chinalco. Rio shareholders will be able to acquire 21 new shares for every 40 shares already held at A$28.29, with shareholders able to trade their entitlements from today. Chinalco has not said if it will take up its entitlement and maintain its 12 percent stake in Rio. Page 50.

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Tim Poole, chairman of rail and port operator Asciano (AIO.AX), has defended the company's chief executive, Mark Rowsthorn, saying "I think he has got to be given an opportunity to be a chief executive with the right capital structure." Asciano has this week announced it is undertaking a A$2 billion capital raising, with the initial A$1 billion institutional placement yesterday increased by A$350 million following strong interest from investors. Shareholders in the company still have to approve a further A$1 billion institutional placement. Page 50.

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The Australian Competition and Consumer Commission yesterday called for submissions as part of its inquiry into petrol refiner and retailer Caltex's (CTX.AX) proposed purchase of 302 petrol stations from Mobil. The wide-ranging review will also examine the effect on competition in the sector of customer loyalty and discount schemes from supermarket retailers Woolworths and Coles, as well as the behaviour of oil refiner marketers and independent retailers. Page 51.

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Automotive component supplier Bosch Group has made a takeover bid for brake and clutch manufacturer Pacifica (PBB.AX). Bosch already owns 76.6 percent of Pacifica, and says the offer of A23 cents a share provides investors "a compelling opportunity to receive a cash price for their shares in an environment where the outlook for Pacifica's earnings is uncertain." In early 2007, Bosch made a takeover bid for the company of A$2.20 a share, which minority shareholders argued undervalued the company. Page 51.

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

Industrial real estate investment trust Goodman Group (GMG.AX) has agreed to a deal with Chinese sovereign wealth fund China Investment Corp (CIC) which will see CIC receive 276 million new options in return for the commitment of A$200 million to a financing facility. The deal, which comes after investment bank Macquarie Group (MQG.AX) agreed to provide a A$300 million facility, will give CIC a stake of around 8 percent in the property group. However, analysts say the Chinese group may seek government approval to acquire up to 20 percent of Goodman. Page 21.

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A takeover bid for Macquarie Communications Infrastructure Group (MCG.AX) was yesterday increased after pressure from major shareholders Tyndall Equities and Lazard Asset Management. The Canada Pension Plan Investment Board yesterday said it would pay a special distribution to investors of A50 cents a share, on top of the original A$2.50 a share offer, if the bid is approved by shareholders at a meeting later this month. The increased offer raises the value of the bid from A$1.37 billion to A$1.64 billion. Page 21.

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Perth-based mining company Avoca Resources (AVO.AX), which has seen its takeover offer for gold miner Dioro rejected as too low, has dismissed an independent valuation of Dioro as "out of touch with reality." Avoca has written to Dioro shareholders criticising the valuation by independent advisors KPMG, saying the "preferred value" of A$1.88 per Dioro share is "376 percent greater than Dioro's pre-announcement closing share price." Dioro shares fell 7.35 percent yesterday to close at A63 cents. Page 22.

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