Australia

BHP Billiton plays catch-up with $7 bln shale hit

15 Jan 2016

Plunging energy prices forced the miner to write down its U.S. oil and gas assets again. The non-cash charge is large but just brings BHP’s balance sheet closer to the outside world’s estimation. A bigger step would be to follow the market’s lead once more and slash the dividend.

Cheap batteries will give utilities electric shock

28 Dec 2015

Local power suppliers have long enjoyed a natural monopoly. But the arrival of low-cost home energy storage from the likes of Tesla makes consumers less dependent on electricity networks. Batteries may even let some developing countries skip the grid altogether.

Qube edges ahead in Aussie infrastructure fight

26 Nov 2015

Brookfield’s $6.5 bln agreed bid for Australia’s Asciano has hit serious opposition from competition regulators. The Canadian group could yet salvage its takeover. But interloper Qube, whose break-up consortium is already examining Asciano’s books, now looks like the favourite.

Aussie target Asciano could push for higher bid

10 Nov 2015

The ports and rail group is now fielding competing, $6 bln-plus takeover proposals from Canada’s Brookfield and a break-up consortium led by local interloper Qube. The target’s board may want to see a clearer gulf in value before hitching itself to Qube’s wagon.

No knockout in Australia’s $6 bln waterfront brawl

6 Nov 2015

Canada’s Brookfield moved to salvage its takeover of Asciano, buying a 19 pct stake to match last week’s lightning raid by rival Qube. The Aussie challenger could hit back by making a full bid for the ports and rail group. Or antitrust referees could haul Brookfield away.

Halliburton’s Baker Hughes bid looks less refined

2 Nov 2015

The gap between the offer and market prices is a yawning 15.4 pct, implying there are serious doubts about the $27 bln oil services merger. Aussie trustbusters have raised fresh concerns. A blocked deal would cost Halliburton $3.5 bln, nearly triple this year’s expected profit.

Brookfield’s Aussie deal faces surprise blockade

30 Oct 2015

The Canadian group’s $6.3 bln offer for Australian port and rail group Asciano has been upset by smaller local rival Qube and partners snatching a 20 pct stake. Brookfield cannot sweeten its way out of trouble. Still, some mix of asset sales and co-investments might just work.

Aussie banks may need fresh capital hikes

22 Oct 2015

Australia’s big lenders have raised about A$20 bln in new capital this year. But the government has now backed an inquiry’s call for domestic banks to be “unquestionably strong”. Strictly interpreted, that could require ANZ, CBA, NAB and Westpac to raise as much capital again.

Bid for Australia’s Santos is a welcome surprise

22 Oct 2015

The indebted LNG producer rebuffed a $5 bln takeover proposal backed by Brunei royalty. Counter-bids seem unlikely but a modest increase could be enough to make this approach palatable. Santos’ Plan Bs – asset sales and raising equity – have also become a bit easier.

Treasury Wine’s Diageo deal toasts drinking alone

14 Oct 2015

The Penfolds maker is buying the British booze group’s U.S. and UK wine operations for $600 mln. It’s the boldest step yet in the Australian company’s turnaround. With its shares near a record high, Treasury has justified rejecting buyout bids from KKR and TPG a year ago.

Glencore getting smaller but maybe not wiser

13 Oct 2015

The embattled commodities trader is hacking back production in a bid to reduce its debts. The latest cut could be a fifth of its copper production. Companies with strong, single-minded leaders often choose to shrink rather than change after crisis hits. That leaves them at the mercy of markets.

New ANZ boss stuck in strategic mid-ocean

1 Oct 2015

Mike Smith is leaving as CEO of the $55 bln Australian lender after eight years. Beefing up in Asia has proved less lucrative than he hoped. Yet a slowing home economy and tightening regulation mean successor Shayne Elliott may have to stay centered somewhere in between.

Aussie vitamins get iron ore-style China boost

18 Sep 2015

A Guangzhou baby-formula firm is gobbling up Swisse, one of Australia’s biggest vitamin makers. The $1 bln deal caps a stunning run for clean-living specialists Down Under. As miners can attest, shifts in Chinese demand can transform an industry’s fortunes for better – or worse.

Aussie leader gets a bust, a boom, and a problem

15 Sep 2015

Mining has slumped while housing has surged. The biggest challenge for new Prime Minister Malcolm Turnbull is a slowdown in GDP that is depressing everything from taxes to profits. He needs to embrace higher public deficits – even if that’s tough for a conservative.

Aussie PM switcheroo is only start of challenge

14 Sep 2015

Malcolm Turnbull will need all his talents. The former tech entrepreneur and Goldman partner has come out on top but faces a wafer-thin majority, a faltering economy and ructions over refugees and climate change – not to mention a political class with a penchant for backstabbing.

Woodside’s $8 bln LNG bid needs more gas

8 Sep 2015

The Australian energy group has pitched an all-share takeover to rival Oil Search. Woodside’s strong balance sheet would provide cheaper funds to develop Oil Search’s Papua New Guinea assets. But a 14 pct premium for a target that isn’t in financial distress looks under-powered.

Chicago toll road owners may avoid highway to hell

21 Jul 2015

Macquarie and Ferrovial are shopping the fee-charging U.S. turnpike, a decade after buying it for $1.8 bln. The high debt and low earnings mean it’ll take a big valuation multiple to recoup the investment. Recent infrastructure deals suggest they could get one.

Brookfield can sail off with Asciano

2 Jul 2015

The Canadian investor wants to buy the Australian ports and rail operator for $6.8 bln. A solid 36 percent premium was enough to get Asciano’s board talking. So shareholders seeking a big sweetener may be disappointed. Part-payment in shares could be the main obstacle.

Mongols and miners bow to market reality

19 May 2015

Rio Tinto and Mongolia have ended a two-year stand-off on the giant Oyu Tolgoi mine by both giving ground. The nomad state now has a fix for plummeting investment inflows. While the miner’s hand looks stronger, falling metals prices have made civility the better part of valour.

Australian bank crisis-proofing takes toll on NAB

7 May 2015

The lender is bracing for higher capital demands by raising $4.4 bln from investors. With valuations still high despite a slowing home market, rivals may follow. Reinforcing a healthy sector is prudent. For shareholders, though, the era of supercharged returns is ending.