PRESS DIGEST-Australian Business News - June 24

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 Anglo American (AAL.L) has rejected a merger proposal from Swiss-based mining company Xstrata (XTA.L). The board of Anglo yesterday released a statement saying that such a deal was strategically unattractive, and that the terms were "totally unacceptable." Analysts said Anglo shareholders believed Xstrata should offer a premium for control of the company, rather than the proposed "merger of equals." Xstrata said it was disappointed and surprised by the response. Page 48.

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Coal to liquids group Linc Energy (LNC.AX) has appointed investment bank UBS to help with the sale of a number of the company's coal assets in Queensland. The move comes after exclusive talks with China's Yanzhou Coal, aimed at the sale of Linc's Emerald coal tenements in Queensland, failed to result in a deal. An announcement on the sale of the Emerald tenements could occur as soon as today, while the sale of tenements in the Galilee Basin is expected to be completed by the end of the year. Page 49.

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Mining company Fortescue Metals Group (FMG.AX), miner Aquila Resources (AQA.AX) and private equity firm AMCI are to start talks on the possible joint development of a deep-water iron ore export port at Western Australia's Anketell Point. Aquila and AMCI are partners in Australian Premium Iron (API), which plans to export 30 million tonnes a year from the state's West Pilbara region, while Fortescue has plans for a 2.2 billion tonne project in the area. API plans to start production in 2013. Page 49.

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Oil and gas company Otto Energy (OEL.AX) has appointed Paul Moore as chief executive, replacing Alex Parks. Mr Moore has formerly been an executive manager at oil and gas companies Woodside Petroleum (WPL.AX) and Santos (STO.AX), with Otto chairman Rick Crabb describing him as "very experienced and highly regarded." Mr Crabb said yesterday that the company was open to exploring opportunities in areas such as Australia or Africa, but is currently about to start exploratory drilling in Argentina. Page 49.

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

-- Australia and New Zealand Banking Group (ANZ) (ANZ.AX) will today announce the sale of its infrastructure business, ANZ Infrastructure Services (ANZIS), which includes assets such as Sydney's ANZ Stadium. ANZIS is being purchased by a consortium including Australian Football League chairman Mike Fitzpatrick, ANZIS managing director John Clarke and corporate adviser Les Fallick in a deal believed to be worth more than A$30 million. Page 19.

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Ratings agency Moody's Investor Services yesterday downgraded its outlook on the Australian banking sector from stable to negative. The report stated that although the four major banks are currently profitable and better-positioned than their global rivals, increasing bad debts and falling consumer demand could negatively affect them in the future. The report from Moody's came as Macquarie Group forecast that revenue growth for the major banks will only reach 4 percent this year, compared to 15 percent last year. Page 21.

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A report on small to medium (SME) businesses in Australia has found that most are currently focused on survival rather than expansion. The JPMorgan-Fujitsu Consulting Australian SME market report found that businesses are relying more on loans as debtors take longer to pay, while interest rates on that debt remains high. The report also said that increased funding costs for banks mean that "it is unlikely that lending rates to SMEs will fall lower than they are currently." Page 21.