PRESS DIGEST-Australian Business News - July 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)
Billionaire James Packer's Crown Ltd (CWN.AX) yesterday abandoned a planned involvement in a US$1.5 billion (A$1.55 billion) casino in the Philippines. Crown had said on June 16 that it would have minimal equity participation in the Manila Bay project. This is the second overseas project that Crown has walked out of in six weeks amid rising debt-funding costs because of the global credit crisis. Investors approved of the announcement, pushing up Crown's share price by 4.2 percent to A$8.33. Page 14.
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United Group (UGL.AX) may participate in a train manufacturing joint venture in India, the engineering services company announced yesterday. United said it was conducting a feasibility study for the project together with Texmaco, a subsidiary of Indian conglomerate Aditya Birla Group. "We are attracted by the size and potential of the market," said United chief executive Richard Leupen. The company already has a presence in India with its property management company, which operates in four major cities. Page 14.
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Utility group AGL Energy (AGK.AX) has paid the embattled Allco Finance Group AFG.AX A$12.5 million for a suite of seven wind farm sites in New South Wales, Queensland and South Australia. The biggest project in the suite is the 180 megawatt World's End site at Burra in South Australia. AGL managing director Michael Fraser said yesterday that the purchase was part of the company's strategy to meet the requirements of the Federal Government's mandatory renewable energy target scheme. Page 16.
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Grains handler GrainCorp (GNC.AX) has signalled a conciliatory approach to stockfeed maker Ridley Group (RIC.AX) after conceding its hostile one-for-nine scrip takeover bid for the latter would be unsuccessful. The offer initially valued Ridley at A$1.39 a share, or A$415 million, but a 37 percent slide in GrainCorp shares since May whittled this down to A86 cents a share or A$260 million. GrainCorp managing director Mark Irwin said yesterday that Ridley was a valued customer, and both companies would benefit by working together. Page 16.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Diversified miner BHP Billiton (BHP.AX) has announced a major find near its Escondida copper mine in Chile. BHP said yesterday the resource may contain at least one billion metric tonnes of porphyry-style mineralisation. The company said it would spend US$327 million (A$337 million) on further drilling at the site and two other prospects in the vicinity. BHP owns 57.5 percent of Escondida, the world's largest copper mine, while Rio Tinto (RIO.AX) has a 30 percent stake and a Japanese-led consortium owns the rest. Page 22.
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Westpac Banking Corp's (WBC.AX) latest regional economic report has predicted that the prices of farm products will remain high for the next decade. Westpac senior agribusiness economist Justin Smirk said yesterday that farm prices, already at 20-year highs, were being propelled by demand from emerging economies including China, India and Brazil. He said while wheat prices were expected to decline over the next two years, a small dry season anywhere in the world would be enough to lift the price again. Page 22.
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Leading telecommunications group Telstra (TLS.AX) has cut about 120 staff at its Chinese real estate and home improvement online business, Soufun Holdings. The announcement came weeks after Telstra abandoned a planned mid-2008 initial public offering for Soufun, which it bought 51 percent of in 2006 for A$251 million. A spokeswoman for Telstra subsidiary Sensis China blamed slowing business activity linked to the Beijing Olympics for the staff cuts, as construction has halted and the number of cars has been reduced. Page 23.
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The Commonwealth Bank (CBA) (CBA.AX) will today unveil its reconciliation action plan, signalling a proactive approach to helping indigenous jobseekers and customers and promoting education of its staff about indigenous issues. The action plan is part of the Reconciliation Australia initiative launched two years ago, which companies including BHP Billiton, ANZ and Qantas have joined. CBA will take at least 40 indigenous student trainees a year for the next three years, and set up an indigenous customer phone line. Page 23.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Westpac Banking Corp's (WBC.AX) A$15 billion bid for smaller lender St George Bank SGB.AX yesterday won the preliminary approval of the Australian Competition and Consumer Commission (ACCC). The competition regulator looked at the two banks' shares in the retail, business and corporate banking markets to gauge the likely impact of the proposed merger on competition within the sector. In its statement of issues report, the ACCC said it had not seen evidence to suggest that St George is a price leader in any of the relevant markets. Page 29.
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Commonwealth Bank (CBA) has entered exclusive talks to buy the Australian investment banking and equity trading business of ABN Amro. CBA began negotiations yesterday with the Royal Bank of Scotland, part of a consortium that recently acquired ABN Amro's Dutch parent, after rival National Australia Bank on Tuesday withdrew from the auction. Observers expect CBA's offer to be at the lower end of earlier sale price estimates for ABN Amro of between A$500 million and A$1.3 billion. Page 30.
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Financial services group Trust Company has downgraded its full-year profit forecast by 10 percent to A$18.3 million. The guidance excludes a A$14 million profit from the sale of its 50 percent stake in a joint venture with the Bank of New York Mellon. The lowered profit estimate came in the wake of the exits of four of Trust's senior executives since May last year, with the latest being the resignation on Tuesday of its managing director, Jonathan Sweeney. Page 30.
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Investment bank Macquarie Group (MQG.AX) has forecast that Australia's gross domestic product growth will drop closer to 3 percent this year and next, down from more than 4 percent last year. Macquarie said while the resources boom will continue to propel the economies of Western Australia, Queensland and the Northern Territory, other states including New South Wales and Victoria will lag behind. Chief executive Nicholas Moore said despite the apparent slowdown, Macquarie remained very positive about the domestic economy. Page 31.
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THE AGE (www.theage.com.au)
Retail magnate Solomon Lew's Premier Investments (PMV.AX) has lifted its takeover bid for clothing trade company Just Group JST.AX, offering an extra A15 cents for each Just Group share. Premier yesterday set a minimum acceptance level of 90 percent of all shares, and declared as final the revised offer of A$2.245 in cash and 0.25 Premier shares for each Just Group share. Premier's sweetened offer values the takeover target at A$810 million. Just Group shares surged 13.1 percent to close at A$3.29. Page B1.
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The Committee for Melbourne will seek the scrapping of fringe benefits tax exemptions for company cars and other similar subsidies as part of the Federal Government's proposed emissions trading scheme (ETS). Committee chief executive Sally Capp said yesterday that the Government needs to counteract the current policy that is producing behaviour that is unhelpful. She said other suggestions in the committee's planned submission in response to the Government's ETS green paper included abolishing cash bonuses to households. Page B3.
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Brisbane-based biotechnology company Progen (PGL.AX) yesterday halted a phase III clinical trial of its PI-88 drug for the treatment of liver cancer. The company blamed difficulties in recruiting patients for the study, slower than expected regulatory approvals in Asia, and the launch of phase III trials of a rival drug produced by Bayer and Onyx. Progen's commitment to continue to seek commercial backing for PI-88 trials failed to fend off a plunge in investor sentiment, causing its share price to crash 52 percent to A58 cents. Page B4.
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Wealth manager and insurer AXA Asia Pacific (AXA.AX) has posted a 13 percent reduction in funds under management, administration and advice to A$95.3 billion in the six months to June 30. The company said yesterday the fall was in line with first-half declines in the S&P/ASX 300 Index and the MSCI world accumulated index. "I am pleased with the performance of our business in the challenging conditions we have seen in the first half," said chief executive Andrew Penn. AXA Asia Pacific shares finished the day up 6.4 percent at A$4.99. Page B4. --
