May 15, 2011 / 8:37 PM / 8 years ago

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)

Farmer Julian Menegazzo, SunRice’s largest shareholder, last week argued against the takeover bid from Spanish group Ebro , saying a valuation by DMR Corporate found the food company was worth around A$100 million more than Ebro’s A$610 million offer.  Mr Menegazzo commissioned the valuation by DMR himself.  However, other large shareholders have supported the deal, saying it addresses SunRice’s need to reduce debt.  Page 14.

Nine Entertainment Co last week completed a deal that gives it an estimated 20 percent stake in online shoe retailer StyleTread for around A$4 million.  The investment is part of a strategy by the media group to increase its digital media business, buying into new companies that can be promoted through Nine’s existing television and magazine businesses.  Nine last year launched group-buying website Cudo, and last month acquired a stake in new wealth management company Yellow Brick Road.  Page 14.

Grant O’Brien, chief executive-elect of supermarket group Woolworths , will meet with some of the company’s top investors this week.  Mr O’Brien, who will take up his new role in October, will be queried on his views regarding the business and potential strategies.  The meetings come amid growing investor concern on how Woolworths will respond to the increasing challenge posed by rival supermarket chain Coles .  Page 14.

Bruce Akhurst, chief executive of telecommunication group Telstra’s directories business Sensis, says the division’s bid to reposition itself as a digital and print advertising consultant to small and medium businesses has received a strong positive response.  Mr Akhurst says many customers have been spending money on a digital presence without understanding what they are receiving, and Sensis intends to provide a “more efficient and accountable” service.  Page 15.

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

Toll Holdings chairman Ray Horsburgh yesterday said the logistics group had narrowed its search for a successor to long-serving chief executive Paul Little down to four candidates.  Mr Horsburgh said all candidates had been made aware that Mr Little, who helped found Toll, would return to the company in a year’s time as a non-executive director.  Mr Little’s replacement is expected to be announced along with annual results in August.  Page 23.

Tim Lehany, chief executive of gold exploration company St Barbara , yesterday said his A$350 million bid for Catalpa Resources , announced on Friday, has the support of his major shareholders. St Barbara’s largest shareholder, Britain’s M&G Group, is in favour of the move, which Mr Lehany said would help fill investor demand for a substantial mid-tier Australian gold mining company.  Page 24.

Mick McMahon, chief executive of labour hire company Skilled Group , yesterday said Australian resources and energy projects “need maybe 500,000 jobs over the next few years.”  Mr McMahon said the Federal Government’s plan to allocate an extra 16,000 places in the skilled migration program would be of assistance, particularly if targeted to those with scarce, high-end skills, but added, “It’s not the main game.”  Page 25.

The Australian Chamber of Commerce and Industry (ACCI), in a submission last week to Fair Work Australia, called for the body’s Minimum Wage Panel to adopt “a cautious approach when it comes to the current minimum wage review.”  The ACCI claimed last week’s federal budget will cut business earnings while the budget also included warnings of the fragility of the global economic recovery.  Page 25.

THE SYDNEY MORNING HERALD (www.smh.com.au)

Two shareholders in mining company Lynas Corporation are preparing a bid for the rare earth and metals deposit the company recently came close to selling.  The sale of the Crown and Swan deposit to Forge Resources was abandoned last week due to investor anger over the related party transaction.  Lawyers for the shareholders behind the latest bid say Lynas would have trouble justifying a rejection of a similarly priced bid from a non-related party.  Page B1.

Shareholders in sugar processing group Tully Sugar will this week vote on a proposal to remove a ban in the company’s constitution on one person owning more than 20 percent of the company.  The sugar mill processes and exports around 260,000 tonnes of raw sugar a year, and has attracted interest from at least three groups - Chinese food company COFCO , global group Bunge , and grower-owned Mackay Sugar, with the bidders valuing Tully at A$126.7 million.  Page B1.

Bernie Brookes, chief executive of department store Myer , yesterday said the company planned to increase its direct outsourcing of goods from China to A$200 million a year by 2016, and would soon open offices in Shanghai and Hong Kong to help co-ordinate the increase.  However, Mr Brookes said “western world labour laws have caught up with China,” which was leading to higher costs that would soon be reflected at the check-out.  Page B1.

Property developer Valad last week said the New South Wales Government had approved the redevelopment of Goldfields House, one of the oldest office blocks on Sydney Harbour’s Circular Quay.  The site will be redeveloped as an apartment block with an adjoining retail and office development.  Valad is currently the target of a takeover attempt by United States group Blackstone .  Page B4.

THE AGE (www.theage.com.au)

Dissident minority shareholders in shopping centre owner EDT Retail trust are continuing their battle against a takeover proposal from United States investment firm EPN Holdings.  EPN owns 48 percent of EDT and has launched a bid offering A$423 million for the remainder of the trust.  However, dissident investors say they would generate more from the sale of individual assets at auction and have requested an extraordinary general meeting in an attempt to have the trust wound up.  Page B3.

Macau’s City of Dreams casino, operated by James Packer’s Melco Crown joint venture, is facing added competition following the opening of Galaxy Entertainment Group’s new A$1.8 billion casino resort in the territory.  The former Portuguese colony, now one of China’s special administrative areas, last year saw gambling revenue increase 58 percent to US$23.5 billion, around four times that of the Las Vegas Strip.  Page B3.

Telecommunications group Optus is to spend A$25 million upgrading its 3G mobile network in Tasmania, adding 80 new mobile sites over the next two years and increasing Optus’s coverage to 96 percent of the Tasmanian population.  Tasmanian Premier Lara Giddings yesterday said the investment would “increase the choice for Tasmanians who need to stay connected for work, education, or simply to keep in touch with their family.”  Page B4.

Australia and New Zealand Banking Group’s global headquarters in Melbourne’s Docklands has been awarded Australian development of the year at the 2011 Property Council of Australia/Rider Levett Bucknall Innovation and Excellence Awards.  The building, developed by Lend Lease , was designed by architects Hassell and Lend Lease Design.  Page B8.

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