Asciano on trading halt. This is a bit rich. The troubled Melbourne based ports and rail owner, Asciano, which was a star performer in the market last week with an unexplained 71 cent rise to close at $4.15, today asked for its shares to be suspended ahead of a possible offer. Asciano was spun out of Toll Holdings last year around a year after Toll had acquired Patrick. Asciano contains many of the port and rail assets owned by Patrick. It tried a stalking takeover of Brambles late last year using Macquarie Bank but was sprung by Brambles and forced to withdraw after the credit crunch sank the shares. Its debt and gearing problems saw the shares plunge 50% or more over the past year to a recent low of $2.68, compared to a high a year ago of $9.75.
On July 21 Asciano said it knew of no reason why the share price should be rising. That was in relation to an ASX query. Clearly someone or some people had an idea last week before it was one of the best performed shares in the ASX 200, rising 20.6% over the week Asciano asked for the trading halt this morning before trading started, saying it was “pending the release of an announcement in relation to an indicative proposal to acquire Asciano.” Asciano later told the ASX that it had received an “unsolicited takeover offer from TPG Capital and Global Infrastructure Partners.”
Asciano has this morning received an unsolicited, non-binding indicative proposal to acquire 100% of the issued securities of Asciano by way of a scheme of arrangement. The proposal includes a cash alternative of $4.40 per Asciano security. There is a scrip alternative of unlisted securities in a bidding company.
Asciano said the proposal had been submitted by TPG Capital and Global Infrastructure Partners. TPG owns Myer here and was part of the bidding team for Qantas that failed. It has been buying into banks in the US and trying to buy into a bank in Britain (Bradford and Bingley) but abandoned that deal. TPG was also sniffing around Coles Group. Global Infrastructure Partners is a joint venture between Swiss investment bank, Credit Suisse and General Electric — Glenn Dyer
Lend Lease shares take a dive. Lend Lease shares fell sharply this morning after the company warned of a sharp fall in profit. The company shares shed more than 11% to around $8.87 after directors warned that 2008 net profit was down 47%. The earnings fall came as the company wrote down the value of assets it has in the UK (where it is trying to raise funds to develop the athletes’ village for the 2012 games with partners. Net profit dropped to $265.4 million in the 12 months to June 30, from the $497.5 million earned the previous year. Operating profit may fall 15% this financial year from to around $447.1 million.
Great Britain’s housing slump prompted a $121.5 million pretax charge on real estate held by the company’s UK Communities business, Crosby Lend Lease. The write-down was carried out “in light of continuing difficult market conditions, which could see further pressure on residential sales prices and volumes,” Lend Lease said in its statement to the ASX. The company’s shares fell $1.13 to $8.87 just before 11.30 am. Lend lease said property investments for Lend Lease dropped $60.2 million in the year as retail real estate values declined and the earnings slump has seen the company cut dinal dividend to 34 cents a share from 42 cents.
In light of continuing difficult market conditions, which could see further pressure on residential sales prices and volumes, Lend Lease has taken the prudent step of writing down the carrying value of Inventory in its UK Communities business, Crosby Lend Lease by A$121.5 million pre-tax. This will not be tax effected in our financial statements. This will reduce the Group’s Statutory Profit After Tax, but is excluded from the expected Net Operating Profit After Tax of A$447.1 million … Given continuing volatility in global credit and property markets, it is difficult to give earnings guidance for FY09 with a high degree of confidence. At this stage Lend Lease expects Net Operating Profit After Tax for FY09 to be approximately 10-15% below expected 2008 Net Operating Profit After Tax of A$447.1 million.
The company said it had $800 million in cash on hand at the end of June, and it indicated it might sell some assets in the current year. The company’s decision to write-down values on UK property holdings will; put pressure on other Australian groups with investments in UK property, such as Valad and Westfield to follow suit and cut their values. — Glenn Dyer
Banks corner the mortgage market. Shareholders in the big five banks worried about the outlook for profits and dividends will take some comfort from a new report showing a shift in competitive power away from non-bank lenders and the widening of the big banks’ interest margins. The good news for bank shareholders, however, is tempered by data in the same report highlighting the vulnerability of the household sector to deteriorating economic conditions and the prospects for a rise in home loan defaults. The report, State of Play – the Australian mortgage market, includes the country’s most comprehensive data on market share in the home loan market. It is produced by research group Infochoice and industry newsletter The Sheet. — Tony Boyd, Business Spectator
Job ads slump signals slowdown. The number of new jobs advertised fell in July, the fifth time in six months, echoing the broad economic slowdown seen in retail sales, and suggesting an eventual slowdown in hiring in the year ahead. Jobs advertised online and in newspapers fell 0.3% in July to an average of 261,936 per week, matching the slide in June. The average number of ads in June was 262,705. In trend terms, total job ads fell 0.7% in July. The job market, though, shows some persistent signs of strength with the total number of ads in July 5.5% higher than a year ago, according to ANZ Bank, which prepares the monthly survey.
“The overall trend in job advertisements continues to weaken, indicative of a softening in hiring intentions across Australia in 2008,” ANZ head of Australian economics Warren Hogan said in a release. “The level of job advertisements remains at high levels, particularly internet ads, and in July the overall rate of decline has slowed.” — Chris Zappone, Sydney Morning Herald
The ethics of taking holidays. Which of the following statements is most accurate for you?
A) I receive 15 days of paid vacation each year, and I take them—guilt-free.
B) I receive 15 days of paid vacation each year, but I feel guilty if I take them.
C) I haven’t had a vacation in years. I’m loyal to my company or business and am proud of this fact.
D) I work for myself and don’t take vacations. If I don’t work, I don’t make money.
Even if you chose A, you surely know people in the other three categories. We in the U.S. wear as a badge of honor the fact that we rarely, if ever, take time off from work. We need to earn a living, and many of us like what we do, so our reluctance to take vacations is justified, right? No, it isn’t. Leaving work behind for a period of time is not only acceptable; it is our ethical obligation. — Bruce Weinstein, BusinessWeek
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