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CBD

Ihlein's worthy list of things he's Ghana-do 


The embattled Brambles chief executive Mike Ihlein did his best yesterday to try to convince the market that it was solely his decision to "retire".

"It's absolutely my decision," Ihlein said. "I've only made the decision in the last 24 hours." The newspaper reports on his departure must have just been a coincidence.

The retiring 54-year-old said he planned to spend more time in Ghana with his Polish-born screen star partner Gosia Dobrowolska helping the charity the Hunger Project.

Hopefully Ihlein will be able to do away with the management speak he uses to describe his involvement in the charity.

In his testimonial on the Hunger Project he says: "Funding an epicentre allows us to watch the progress in a specific community over an extended period."

Back in business

Have the Toll Holdings managing director Paul Little and his old sparring partner from Patrick Corporation, Chris Corrigan, kissed and made up?

Four years after Little launched his very hostile takeover bid for the Corrigan-led stevedore, the two are back in business together.

The Kaplan-listed Diversified Infrastructure and Logistics Fund, whose investment advisory committee is chaired by Corrigan, announced yesterday that it was part of a consortium that bought a 50 per cent stake in the car stevedore Prixcar.

Toll owns the other half. In response to Little's initial scrip takeover bid in 2005, Corrigan described Toll shares as "funny bits of paper".

Little at the time described Corrigan "as devoid of any strategy or vision".

Dinner going

The contributions property moguls make to society are often overlooked. So it was especially touching yesterday that the Meriton founder and billionaire Harry Triguboff was named as Property Person of the Year for a second time by the lobby group that serves his interests, the Urban Taskforce Australia.

Rather than just build giant Lego-like towers for his own profit, he appears to be a very giving type.

"While property development generally has been struggling, Harry Triguboff has helped shape Australia with billions of dollars of development," the lobby group said in a media release yesterday.

It also noted how Triguboff was "also known for his strong support of charitable causes". And if you thought this year's awards dinner on November 4 was a tad late, you are right.

The taskforce's chief executive, Aaron Gadiel, conceded the judges decided to delay this year's awards owing to the recent troubles in the property sector.

"The market was in a funny place at the start of the year, and it was very hard to judge [the winner]," said Gadiel, who in the past served as the chief of staff for the state Labor powerbroker Eddie Obeid.

The finalists were judged only after the recent reporting season. So it appears Peter Hurley of Valad, Steven Sewell of Macquarie Countrywide, Glenn Rufrano of Centro Properties, Victor Hoog Antink of Dexus and Matthew Quinn of Stockland may have seen their chances slip after presiding over $1 billion-plus losses. Shame there is no award this year for the biggest loser.

Maybe the Taskforce has learnt its lesson from the previous awards it has presented.

In 2006 the gong went to Macquarie's former real estate guru Bill Moss, who left the firm before its various property satellites were minced by the credit crunch.

The 2007 honour went to the Goodman boss Greg Goodman, who went on to see a 90 per cent collapse in his company's share price and a recent billion-plus full-year loss.

Then last year the Leighton chief executive, Wal King, also saw a dip in his share price. Hopefully, this year's award will not affect Harry's future earnings.

Safe seat

Next month's Urban Taskforce gala dinner at the Hilton could be the first true test of whether state MPs still feel all right about being seen in the same room as lobbyists.

The former premiers Bob Carr and Morris Iemma were always on hand to present the Property Person of the Year award.

If the Premier, Nathan Rees, manages to rock up it remains to be seen which table he will sit on.

One may assume the deputy chairman of the taskforce, Bob Ell, the developer and former employer of Michael McGurk, will be on one of the head tables.

The lobby group's chairman is Bob Rose, the developer of the 52-hectare Breakfast Point site on the Parramatta River.

Wiser mail

Harry Triguboff's ego will be further inflated by another event this Friday.

He will join the retailer Gerry Harvey and te former Australand chief executive Brendan Crotty at a lunch hosted by the Property Council of Australia titled Three Wise Men.

It is good to see Crotty has enough spare time to share his wisdom. Last week he resigned as chairman of the property player Trafalgar Corporate Group "due to increasing work commitments".

He was "unfortunately" forced to quit before Trafalgar's annual meeting next month, at which the company may have to explain its recent $62.5 million full-year loss to shareholders.

Crotty, who will retain his seat on the Brickworks board, blamed his increased commitments at the Barangaroo Delivery Authority, on which he serves as a director.

The authority is responsible for the stalled $2.5 billion redevelopment of the former Darling Harbour container berth.

Its other directors include the Rabbitohs joint owner Robert Holmes a Court, the Lord Mayor of Sydney, Clover Moore, and the spin doctor Gabrielle Trainor.

Alfa mail

The business TV channel lambasted by the US satirist Jon Stewart for its coverage leading into last year's train wreck on Wall Street has launched a challenge.

CNBC next Monday will start a competition for wannabe foreign exchange traders in Australia, who will be given the chance to out-trade each other in an effort to win an Alfa Romeo.

Each participant will be given five "fictional" trading accounts and a million "CNBC Bucks" to trade with.

The competition runs until December 19. At least traders can be comforted to know they only risk losing fake money and will not have to rely on CNBC tips.

Stewart started his battle with CNBC when he remarked: "If I had only followed CNBC's advice I'd have $1 million today. Provided I had started with $100 million."

One of his targets was CNBC's chief stock picker, Squawk Box's Jim Cramer, who one week before the implosion of Bear Stearns said: "Bear Stearns is fine. Bear Stearns is not in trouble."

There was also the interview CNBC had with the disgraced former cricket-loving Texan billionaire and alleged crook Sir Allen Stanford, in September last year, when it noted how he had managed to avoid "the subprime debacle".

Email srochfort@smh.com.au

 

Insider

Edited by Jamie Freed

 

GrainCorp looks for growth further afield

The recent spate of consolidation in the agriculture sector, as evidenced by Viterra's purchase of ABB Grain and AWB's looming partnership with a global commodities trader, has led companies like GrainCorp to take a more worldly view to remain competitive.

GrainCorp's $757 million purchase of United Malt Holdings will give it a valuable foothold in the North American and European grain markets in terms of market intelligence and storage facilities that can be used for barley, wheat and other products.

Over the longer term, it could make bolt-on acquisitions in those regions.

When CHAMP Private Equity and its US partner, Castle Harlan, first started a sales process for all of UMH in February last year, GrainCorp expressed interest, but only in the Australian portion.

Viterra is also said to have been interested at the time, although it could have faced competition issues in the Canadian market.

The sales process, run by RBS and Goldman Sachs JBWere, was pulled in December after the global financial crisis set in and did not resume until April or May – about the same time Viterra lodged its bid for ABB.

By that time, market conditions had improved enough for CHAMP to consider a float as a viable alternative to a trade sale, although it probably would have needed to keep a 20 per cent stake to appease wary institutions.

Then GrainCorp, advised by Credit Suisse, decided buying the entire business would make strategic sense.

It will decrease GrainCorp's reliance on rainfall in eastern Australia by allowing it to supply grains to Asia from either Australia or North America.

And the addition of the malt business, which is the supplier to Foster's Group locally, will give it vertical integration.

The market appeared very supportive of the deal, and there is an expectation that a bookbuild for the renounced rights today will lead to a price above the $5.65 on offer to existing shareholders.

This deal, along with Amcor's purchase of some of the Alcan packaging business from Rio Tinto, also demonstrates there is equity funding available to companies for logical acquisitions in this market now that most balance sheets have been fixed.

Interest fears

Myer boss Bernie Brookes may have attempted to put a brave face on the Reserve Bank's decision to kick off the first interest rate tightening cycle since 2002 yesterday, but the private equity owners of potential retail floats are unlikely to be pleased by the timing.

Kathmandu is pre-marketing its float this week, while the Rebel Sport owner, Ascendia, has yet to pick advisers after a "beauty parade" on Friday.

And Myer's retail offer kicked off yesterday, just as consumers started to factor in the prospect of rising mortgage payments.

Myer is expected to start trading on November 2, and some observers think it is no coincidence that when pre-marketing began, the market did not expect interest rates to start rising until November.

Now there is the prospect of another 25 basis point rate rise – or possibly even two - before Christmas, which could put a damper on consumer confidence in the most important spending season of the year.

David Jones shares plunged 5 per cent yesterday and JB Hi-Fi and Harvey Norman shares also fell. Merrill Lynch has said David Jones and Billabong International saw the biggest hits to their share price in the last tightening cycle.

The Myer prospectus contains plenty of mentions of interest rates, which is deemed one of the "key consumer demand drivers".

It said the negative influence of the global financial crisis had been partly offset by a reduction of interest rates and added any recovery would be "further supported by the current low interest rate environment".

The prospectus also warns there is a risk that rate rises could affect consumer sentiment and the level of customer demand, potentially leading to a decrease in spending that could have a "material adverse impact" on Myer's future financial performance.

Brookes last night claimed rising rates were unlikely to have a significant effect unless they rose by 200 to 600 basis points over the next several months.

It remains to be seen whether the institutions targeted to participate in the float agree with his assessment.

Shelling out

If the Myer sale proceeds as planned, TPG will receive some hefty proceeds.

Insider hears it is likely to reinvest the funds in Australasia – which it views as an attractive market – rather than shipping them back to its global headquarters in the US.

It is no secret that TPG was interested in helping with the recapitalisation with Asciano, although that offer was eventually rejected.

And now, TPG is understood to be taking a look at Shell's New Zealand assets, including 230 petrol stations and a stake in that nation's only refinery.

The sales process run by UBS, which could attract $NZ1 billion or so, still has some way to run.

TPG and UBS have not had stellar relations of late, with the Swiss investment bank said to be excluded from serving as a lead manager or co-manager to the Myer float due to its role in advising Asciano to raise equity rather than partner with TPG.

Returning to petrol, it remains unclear whether TPG is taking a look at ExxonMobil's downstream assets in New Zealand, which are also for sale.

Meanwhile, at least some of ExxonMobil's petrol stations in Australia could return to the market soon, pending the announcement of the competition regulator's ruling on Caltex's planned purchase of those assets on November 11.
 
jfreed@smh.com.au

Briefs

 

Westpoint

Executive in court A former chief financial controller of the collapsed Westpoint Group has faced a Sydney court on two criminal charges brought by the Australian Securities and Investments Commission. It is alleged that Graeme Rundle of Perth made false statements to a financial institution in May 2004 in support of an application for a $71 million credit facility.

Iron Ore

Territory debt deal The iron ore producer Territory Resources has managed to offload its most pressing debts to its largest shareholder, Noble Resources. Under the terms of transfer Noble has bought two short-term loans totalling $17.6 million owed by Territory to its bank. In return, Noble acquires a fixed and floating charge over Territory's assets.

Wheat deal

Clear winners Clear Group, which acts as a middleman between Australia's wheat growers and grain buyers in the new deregulated export market, has welcomed its takeover by NZX, New Zealand's sharemarket operator. NZX is buying Clear for $6.4 million, but the price will rise if trading volumes grow in the next three years.

Bio buyout

Canadians pounce The consolidation of Australia's sprawling biotechnology sector took a step forward yesterday when Cytopia announced a $14 million agreed all-scrip takeover by Toronto company YM BioSciences. YM is listed on the Toronto Stock Exchange and New York Stock Exchange.

Counter bid

Asia wants Polaris The takeover of the iron ore explorer Polaris Metals NL by Mineral Resources Ltd remains uncertain after an Asian company made a higher counter-bid valuing the company at $106 million. Polaris directors are considering the announcement from Lion-Asia Resources, which made an off-market, all cash offer of 60c a share after the close of trade on Monday. Lion-Asia said the bid would trump a rival offer made in August by the Australian mining services and contracting company Mineral Resources Ltd. In August, MRL made a scrip bid that gave Polaris an implied value of 50.4c a share.