Australia

Aussie energy woes put miners in windfall hole

5 Dec 2022

Canberra may cap the soaring price of coal or tax profits to reduce electricity costs. That’s a potentially explosive new risk for producers like Whitehaven, which is buying back up to a third of its stock at near record highs. Such short-term largesse could come back to burn.

Blockchain hype gets useful Aussie wake-up call

17 Nov 2022

Bourse ASX is pausing its much-delayed distributed-ledger clearing system and taking a $170 mln hit. The troubled project was beset by old-school problems like poor communication and planning. Such human flaws, though, bleed into how the technology gets developed.

Brookfield crafts compelling Plan B climate deal

10 Nov 2022

The Canadian investor is leading a $12 bln bid to break up Origin and will spend a similar amount itself to speed up the Australian target’s energy transition. It’s a trickier buy than a failed move on rival AGL. If it succeeds, it will offer a model for other consortiums.

Money manager M&A mess is dismal industry advert

3 Nov 2022

A consortium including newly enlarged EQT is offering $1.1 bln to dismember Australia’s Perpetual. It’s a promising starting bid. But it comes months after the target agreed to buy a rival. The convoluted affair belies everyone's pitch of being good stewards of capital.

Fear makes Macquarie shareholders reasonable

28 Oct 2022

The $42 bln Aussie financial powerhouse’s value has finally dropped to a level justified by its profitability. That’s mostly thanks to boss Shemara Wikramanayake’s warnings that earnings might slow. If skies clear, irrational investor exuberance could revive in a flash.

Australia has bulwark against China slowdown

26 Oct 2022

Demand from Down Under’s top trading partner is cooling. But Treasurer Jim Chalmers' first budget assumes the price of exports like iron ore will fall while also keeping a tight lid on spending. The fiscal discipline will be a shock absorber if China’s growth disappoints.

Aussie budget could do with a spot of dam-busting

24 Oct 2022

Rising inflation and expectations of lower growth put Treasurer Jim Chalmers in a tight spot as he prepares his first comprehensive fiscal policy. Cancelling up to $4.7 bln worth of the previous government’s plans for unnecessary water infrastructure would relieve some pressure.

Trussonomics lights slow-burning Aussie fuse

14 Oct 2022

The disastrous UK mini-budget has sparked a debate Down Under about income tax cuts due in 2024. Prime Minister Anthony Albanese risks a political backlash if he pulls a U-turn, and the treasury does have some wiggle room. But pressure to change course will be hard to extinguish.

Green hydrogen revolution risks dying of thirst

5 Oct 2022

Backers make three miscalculations about the gas’ key input, water: that they won’t need much, that it’s cheap, and that desalination is a breeze. Some $700 bln is needed for projects from Australia to Saudi to Europe, but water scarcity means many will be left high and dry.

CVC’s burial business bets on lively market growth

27 Sep 2022

The buyout shop is mulling offers for Nirvana, a Southeast Asian funeral services outfit offering family plots. A sale for up to $2 bln, almost double what it paid, would imply robust demand for financial planning. Asia’s booming life insurers underscore the opportunity in death.

Musk can only wish Twitter was an Aussie company

19 Sep 2022

The Tesla CEO has to go to court to try and worm his way out of buying the microblogging site. Acquirers Down Under are allowed to revise their agreed price even after the target’s board approves a sale. Link Administration’s troubled $1.3 bln takeover saga is a case in point.

Disney’s big ESPN choice, Rio Tinto Mongolia drama

15 Sep 2022

Activist Dan Loeb backed away from his demand that the $203 bln media firm sell its sports network. In this Viewsroom podcast, Breakingviews columnists debate whether it’s the right move. And the $94 bln mining giant’s attempt to secure copper supply may need heavier machinery.

Aussie dealmakers face embarrassment of ditches

13 Sep 2022

KKR’s $14 bln Ramsay pursuit is on life support. Toll-road owner Atlas Arteria’s top investor may go activist over its $2 bln purchase of Chicago Skyway. And a UK watchdog may scupper Link’s takeover saga. Fears of value destruction are jeopardising deals once seen as sure bets.

KKR’s $14 bln Aussie deal is not quite deceased

26 Aug 2022

A consortium led by the U.S. private equity firm has made two offers for Ramsey Health Care. One has been rescinded by the buyers, the other rejected by the target, putting any deal in limbo. Yet both sides can still reach an agreement, provided KKR further opens its wallet.

Australia’s investing giant is taking on the world

23 Aug 2022

Inflation and rate hikes made for a tough first year atop AustralianSuper for Paul Schroder. In this week’s Exchange podcast, he lays out his plan to quadruple the country’s largest pension manager in size by expanding abroad, learning from peers and targeting private equity.

BHP’s bumper year is bad news for its M&A quarry

16 Aug 2022

The mining giant’s record EBITDA and dividend suggest it could up its $5.8 bln rejected offer for OZ Minerals. But the impressive performance is in part due to better overall discipline that investors are only just appreciating. Boss Mike Henry will be reluctant to change course.

Rio minorities’ bet is far from copper-bottomed

15 Aug 2022

Investors who hold the 49% of Turquoise Hill Resources not owned by the mining giant have spurned a $2.7 bln offer to buy them out. True, copper prices could rebound and hike the value of their giant Mongolian copper mine. But Turquoise’s minorities may need a deal more than Rio.

Aussie banks’ “fortress” balance sheets win kudos

10 Aug 2022

Jamie Dimon coined the phrase to highlight JPMorgan’s strength during the 2008 financial crisis. But it applies best to Australian lenders like Commonwealth Bank, which now carry 50% more capital than U.S. peers. That does crimp returns, but has bolstered shareholder value.

BHP’s metals deal could use some schmuck insurance

8 Aug 2022

CEO Mike Henry’s rebuffed $5.8 bln bid for OZ Minerals pits a mining giant trying to bulk up on nickel and copper, vital to electric cars, against a scrappier rival. Offering performance payouts on top of a premium would help address both sides’ risk and reward calculations.

Atlassian CEOs give Elon Musk mission-creep lesson

1 Aug 2022

The $53 bln software company’s two bosses are using their own cash for dealmaking side projects. They’re avoiding getting too distracted from their day job by having experts mostly run the show. It’s a useful example of how the Tesla chief can avoid a repeat of his Twitter mess.