Australia

Ferrovial is back in conquistador mode

22 Oct 2014

The Spanish group is chasing deals worth 1.8 bln euros in three countries including Australia. The spree echoes its 2006 pursuit of airport operator BAA, which nearly dragged it down. But these acquisitions look less risky. Thanks to savvy sales, Ferrovial has cash to spend.

China coal tariffs blacken Aussie free trade talks

14 Oct 2014

Import taxes will help China to protect its ailing domestic producers from a glut of cheap foreign supply. Yet raising the defences makes it even harder for Australia, a top exporter, to present a long-awaited agreement with its top trading partner as evenly balanced.

Glencore Rio takeover would be harder than Xstrata

7 Oct 2014

Ivan Glasenberg’s miner-trader is stalking $90 billion iron giant Rio Tinto. Though there’s some logic to a deal, Glencore will be loath to pay much of a premium, and the clash of cultures would be extreme. Rio is also in a better position to resist than rival Xstrata in 2012.

Aussie companies face overseas growth dilemma

2 Oct 2014

The pressure to look beyond a consolidated home market is mounting as growth slows. A poor record of investing abroad has made companies down under cautious, and means they lag behind U.S. peers. Despite the challenges, expanding in Asia makes the most sense.

Bid rebuff pours pressure on Treasury Wine

29 Sep 2014

The Australian owner of Penfolds ended talks with private equity bidders saying a $3.1 bln offer undervalues the company. A 11 pct share price drop suggests investors aren’t totally convinced. There may be room for buyers to return if the still-new CEO can’t turn things around.

Australia at sharp end of China outbound ambition

19 Sep 2014

Growing ties to China are a source of anxiety but the lop-sided relationship is here to stay. As Chinese buyers widen their horizons from resources to property and education, Australians have a chance to show they’re pragmatic. Beijing could help too, with a touch of soft power.

Aussie privatisation push makes for buyer’s market

8 Sep 2014

State governments are being encouraged to sell off infrastructure assets. The estimated value of the pipeline is equal to almost three-quarters of the total M&A activity in the country over the past two years. A lack of coordination could leave laggards with lousy valuations.

Airlines find hidden value in miles

4 Sep 2014

Loyalty schemes are reliable money spinners in a cyclical and fiercely competitive industry. In times of financial strain, carriers can also sell stakes to outside investors to raise cash. But the potential opportunity isn’t equal for all. A big home market helps.

Qantas maps out smoother flight path for investors

28 Aug 2014

The Flying Kangaroo has capped a torrid year with a record loss. But CEO Alan Joyce is cutting costs, writing down the value of Qantas’ fleet, and separating its international unit. Debt is down, while capacity growth in the industry is slowing. No wonder the shares are rising.

BHP spin-off won’t appeal to commodity players

19 Aug 2014

The mining giant plans to hive off some assets into a new company. The prices of nickel and aluminium, two of its key products, are rising. Investors could use the new firm to follow the trends. But they probably won’t. There are purer plays and better-diversified producers. 

BHP cheer shows premium on focus

15 Aug 2014

The miner’s shares rose on news its demerger idea is nearer fruition. A split won’t transform the business, and it’s hard to see the separated $12 bln-plus unit being bid for. But simplicity is in vogue. So creating stocks for distinct investor bases can create shareholder value.

Aussie bid battle questions wine’s standalone case

12 Aug 2014

Two buyout groups have submitted rival $3.1 bln offers for the world’s only big listed wine producer. Australia’s Treasury Wine could benefit from better management. But a fragmented market and low brand loyalty also suggests the business is not suitable for the stock market.

Treasury Wine resistance withers under KKR assault

4 Aug 2014

The Australian wine maker has agreed to open its books after the buyout group raised its cash offer to $3.15 billion. The bid could yet turn sour, or other suitors may come forward. But Treasury’s spell as a listed company looks like it will soon be coming to an end.

Aussie M&A gets a helping hand from overseas

10 Jul 2014

It’s back to life for investment bankers down under. Merger activity is on track for its busiest year since 2011. Foreign buyers are leading the charge while privatisations have helped to prop up volumes. As corporate confidence picks up, the recovery should be sustained.

Woolworths pays too-steep ransom in Aussie battle

24 Jun 2014

The South African group is buying billionaire Solomon Lew’s stake in an Australian unit in return for his support in its $2 bln takeover of retailer David Jones. The $201 mln side deal lifts the effective takeover premium – raising the pressure on Woolworths to realise synergies.

Aussie billionaire has least to lose in retail war

19 Jun 2014

Solomon Lew’s purchase of 10 pct of retailer David Jones could scupper a $2 bln takeover by Woolworths. The move may be an attempt to force the South African group to raise its bid or buy the retail veteran’s shares in another subsidiary. The two companies have the most to lose.

DTZ gets solid foundations in $1.1 bln sale to PE

16 Jun 2014

Australia’s UGL is selling the property services group to pay down debt. New private equity owners TPG and PAG Asia bring capital and management expertise. That could be enough to allow DTZ to challenge rivals CBRE and Jones Lang LaSalle, which are more than twice its size.

Westfield’s split vow leaves investors in dead end

9 Jun 2014

The Aussie shopping mall giant says it will split its local and international operations even if shareholders reject plans to carve up the $29 bln group. The threat may help Westfield get its controversial deal over the line. Unhappy investors have little choice but to sell out.

Aussie property bet cements risk for Thai tycoon

5 Jun 2014

The billionaire who broke up Fraser & Neave last year is back on the M&A trail with a $2.4 bln bid for Australand. Buying down under would dilute exposure to Singapore, but pile debt onto a group still digesting its last deal. Managing the risk will require fancy footwork.

KKR’s $3.1 bln bid pours pressure on Treasury Wine

20 May 2014

The Australian wine producer has rebuffed an opportunistic offer from the U.S. buyout firm. The former Foster’s unit is a persistent underperformer. Treasury’s new CEO needs to quickly demonstrate his turnaround credentials, or let KKR try to squeeze out some value instead.