• Home
• »
• Radar

• Home
• Executive Jobs
• Features
  • Focus
  • Career Couch
  • Radar
  • Water Cooler
  • Insight
  • Podcasts
• Place an executive ad

Facial adornments ... Peter Botten, David Liddy and Chris Morris.

CBD

Macquarie tipsters add to the scoreline 

Macquarie Group 2, Steve Keen 0. Australia's top Doomsday economist has failed his latest prediction, having already lost his bet with the Macquarie pundit Rory Robertson about the direction of house prices.

Dr Keen's top pick for the Melbourne Cup, Changingoftheguard, was scratched, while his place picks, Crime Scene and Roman Emperor, finished second and further back in the field respectively.

Robertson wimped out of providing a tip to CBD before race day. But the Macquarie Equities team of quantitative analysts came through for him with a winner.

In a morning note the team said Shocking was "at the top of the model".

"This year the stockmarket is rewarding value, so we upweight the value inputs into our model to try [and] take advantage of the anomaly," the research note said.

Value comprised 10 per cent of the weighting in making the tip, with sentiment, momentum, hit rate, age and barrier contributing factors.

Unfortunately, the head of the quantitative team in Sydney, George Platt, was too busy to place a bet.

He was crossing his fingers one of his team members, John Conomos, who made it to Randwick Racecourse yesterday, followed up on the tip.

"I'm hoping he put some money on it," Platt said. It is the first winner the quantitative team has picked in its three years of providing tips – better than its infrastructure punts.

Air puncher 

Another winner on race day was the chief executive of Lion Nathan, Rob Murray, who put $40 on Shocking from his Japanese-owned company's marquee at Flemington racecourse.

But one CBD spy in the marquee suggested Murray could have placed another $880 on the other 22 horses just so he could punch his hands in the air when the winner passed the post.

One late arrival to Flemington on race day was the managing director of the livestock exporter Wellard Rural Exports.

Steve Meerwald had a hectic schedule before making it to see his pony Basaltico finish 18th in the big race.

CBD was told yesterday that Meerwald had to apologise profusely to his tailor for leaving some sheep dung on his floor, just after loading a ship with live sheep on the eve of Cup day.

Burma prospect

Those shareholder and human rights activists left twiddling their thumbs because of a dearth of Burma action have been given hope that they may have a busier annual meeting season next year.

They did have the chance to vent their disapproval of Jetstar for flying into Burma at the recent Qantas annual meeting, but they could have more to chew over next year.

A Perth-headquartered oil exploration company that is on the international blacklist of companies doing business in the pariah state has stated in its accounts lodged last month that it is still looking for a listing.

Twinza Oil has a stake in an exploration block off the Burmese coast, which according to the ACTU-funded "Don't deal with Burma" campaign, could help the country's military regime earn up to $US2.5 billion ($2.8 billion).

Twinza is majority-owned by Bill Clough, who hails from the wealthy Perth engineering family.

Twinza even gets a mention on the UK Campaign for Burma's "Dirty List".

When Clough signed the deal for Twinza to look for oil off Burma in 2006, the Australian part-owned Myanmar Times quoted him as saying: "We are very excited to be the only independent to now be involved in the offshore hydrocarbon sector, it being the most important and dynamic industry in the country.

As a geologist, I can tell you, my sense is that there are considerable commercial hydrocarbons to be discovered in this, the Yetagun East Block."

Meanwhile, another Clough-founded explorer, Mirabela Nickel, is producing its first nickel from its project in Brazil. Mirabela's shares have increased more than 13-fold since their listing.

Movember lite

This year's Movember fund-raising effort has highlighted concerns that the ranks of senior blue-chip executives with moustaches are at their thinnest in decades.

The departure of Telstra's moustachioed chief executive, Sol Trujillo, in May hit the mo corporate index hard, along with Rod Eddington bowing out of contention for the chairmanship of ANZ.

The biggest moustache in the super sector, the Australian Super chief executive Ian Silk, is at least relieved there is now one month of the year where he will not be harassed for his handlebar.

Silk, who has had his mo for about 25 years, said: "It's been in fashion a couple of times in that period and out of fashion for most of it."

The most moustachioed firm in the top 100 is Oil Search, whose chief executive, Peter Botten, chairman, Brian Horwood, and general manager for Papua New Guinea, Gerea Aopi, all have facial hair.

Admiralty Resources has a chief executive, John Anderson, with a Silk-style handlebar, a bearded chairman and goatied company secretary.

Other mo representatives are the executive chairman of Computershare, Chris Morris, Nino Ficca of SP Ausnet and the hairy-lipped chief executive of ARB, Roger Brown. Rio Tinto's most senior moustache is its coal boss (and architect of the failed Chinalco deal), Doug Ritchie, and BHP Billiton's head of petroleum, Michael Yeager, has a Groucho Marx-style mo.

However, the managing director of Ask Capital of Brisbane, Russell Templeton, has confused matters.

He told CBD that he had started growing a "Mexican looking thing" under his lip to accompany his already lush mo. In preparation for a coming trek in Jordan with his son, Templeton said: "We want to attempt to grow a goatie and an Arabian Nights beard."

Asked about the lack of facial hair in the corporate sector, Templeton made a comparison to the Australian cricket team's slide since its moustachioed heyday.

The chief executive of the Bank of Queensland, David Liddy is one of the banking sector's leading moustaches, while Mortgage Choice has its new hairy-lipped chief, Michael Russell.

Woolworths has imported the facial haired Lowes executive Don Stalings to head its foray into the hardware market. Other moes include: the chief finance officer of Santos, Peter Wasow; the chief operating officer of News Corp, Chase Carey; the Ramsay Health bean counter Bruce Soden; and the chairman of Babcock & Brown Power, Len Gill. Bruno Grollo, the builder of Melbourne's tallest towers, the Rialto and Eureka, has trimmed down his once bushy mo.

Wavish holding

CBD incorrectly reported that the former executive chairman of Myer Holdings, Bill Wavish, had sold half of his stake in the retailer into its float.

A Myer spokeswoman said Mr Wavish held about 6 million shares under his name; another 5.7 million were held in a fund that had a shareholding in the retailer.

Mr Wavish and Myer's chief executive, Bernie Brookes, have stakes worth $45 million each.

Got a tip? email srochfort@smh.com.au

Insider

By Jamie Freed

Amalgamated cashes up to chase growth 
 
Amalgamated Holdings certainly picked a shockingday for a capital raising.

The leisure and entertainment group yesterday unveiled plans for a $107 million equity raising with a structure that some in the market would deem a throwback, now that almost every renounceable rights issue is an accelerated undertaking with accompanying book-builds for the rights not taken up.

Instead, Amalgamated will allow investors to trade any renounced entitlements on the stock exchange over the next few weeks.

The last raising under that structure is believed to be Argo Investment's $440 million rights issue in February 2007, but these raisings could make a comeback as they tend to provide more value for renounced rights than a bookbuild.

Adding to the relative uniqueness of the Melbourne Cup day raising was the fact that it was not underwritten.

Of course, considering that seven of the largest shareholders with control of 70 per cent of the stock – including Investors Mutual, Maple-Brown Abbott and Perennial Value Management – agreed to participate after signing confidentiality agreements last week certainly lessened the risk of proceeding without an underwriter.

Caliburn was the only adviser on the raising and will receive just $1.3 million, which is well below the 3 per cent or so an underwriter would have received.

It was also interesting that the funds raised by Amalgamated from the one-for-five rights issue at $4.10 a share will be put towards growth and acquisitions rather than repaying debt.

Few other recent raisings have been undertaken by companies that had no need to repay lenders. However, if the market remains relatively stable, that could become a more common occurrence.

Amalgamated has recently acquired two hotels and leasehold interests in two cinemas and is currently examining the purchase of another hotel, possibly with a partner.

The hotel will cost about $34 million, and that may or may not be split with the potential partner. Amalgamated shares closed 2c lower at $5.95, with rights trading starting on Friday.

Elsewhere in the leisure sector, Gage Roads Brewing has revealed it is in talks with lenders and major shareholders to raise money to speed up its expansion plans.

Woolworths is Gage's largest shareholder, with 25 per cent of the company, after the pair cut a deal earlier this year to make it a contract brewer for the retailer's private label beers.

Shell game in NZ

After months of speculation, Royal Dutch Shell finally appears close to selling its downstream oil assets in New Zealand.

Infratil and the New Zealand Superannuation Fund consortium have entered exclusive negotiations with Shell over the petrol stations and 17.1 per cent stake in the country's only oil refinery.

The proposed selling price, reached after other bidders also submitted binding offers to Shell's advisers at UBS, is expected to be about $NZ600 million ($480 million).

Private equity group TPG is believed to be one of the jilted bidders. Infratil and its partner have entered the final stage of due diligence, and a deal is likely to be completed by the end of the year.

In contrast to the Australian Competition and Consumer Commission's close scrutiny of the sale of ExxonMobil's Australian service stations to Caltex, this deal is not expected to attract much attention from New Zealand regulators.

ExxonMobil has also put some of its downstream assets in New Zealand on the block in a process run by Goldman Sachs JBWere. There are some suggestions those assets could be worth less than the ones being sold by Shell.

Back to mine 

The official resurrection of Rio Tinto's sale of the Northparkes copper-gold mine in NSW – expected to fetch in the neighbourhood of $US1 billion ($1.1 billion) – has led some investment bankers scrambling to pitch (or re-pitch) the acquisition to potential buyers.

As noted yesterday, OZ Minerals had expressed serious interest in the asset before the sales process, run by Macquarie Capital, was pulled during the depths of the global financial crisis last year.

Northparkes is a mid-tier asset that is most likely too small to attract the interest of major diversified miners such as BHP Billiton, Anglo American, Vale and Xstrata.

Additionally, the Japanese trading house Sumitomo owns 20 per cent of the mine, and it is unclear whether it holds a pre-emptive right over the remaining stake.

Industry sources said potential buyers of Northparkes would likely include companies such as OZ, Antofagasta, Vedanta, Hindalco, China Minmetals, and possibly Glencore, which owns the Cobar copper mine in NSW.

Meanwhile, there is also expected to be strong interest in Rio's Sweetwater uranium assets, which are for sale in the US.

Uranium One had agreed to pay $US110 million for the package in 2006 before Rio yanked it off the market when uranium prices rose.

Potential buyers for Sweetwater could include companies such as Uranium One, Paladin Energy, Mega Uranium, Denison Mines, Cameco and Asian utility groups.

Finally, Rio has also modified the prospectus for its proposed US listing of its Powder River Basin coal assets under the moniker Cloud Peak Energy.

It now expects the initial public offering, led by Credit Suisse, Morgan Stanley and RBC Capital Markets, could raise $US650 million, up from an earlier prediction of $US500 million.

On Friday, Rio said it thought the coal float could occur by the end of the year.

jfreed@smh.com.au

Business Briefs

 
Entertainment

Capital raising The entertainment, hospitality and leisure group Amalgamated Holdings is aiming to raise $107 million through a one-for-five renounceable entitlement offer at $4.10 to strengthen its capital base.

Publishing

WAN down 22% West Australian Newspapers has posted a 22.9 per cent fall in net profit for the September quarter to $22.9 million but says it is well-placed to benefit from growth in the state's economy. It said the result reflected an improvement of 18.6 per cent on the average for the previous two quarters.

Banking

Westpac appeals Westpac has appealed a decision by the New Zealand High Court relating to structured finance transactions in the country. The decision left the bank facing a $NZ918 million ($730 million) tax bill.

Infrastructure

Two in agreement Macmahon has extended its memorandum of understanding with Leighton Holdings over a partnership on large infrastructure projects. The groups have dropped a standstill agreement in their original pact that Leighton obtain Macmahon's written consent before extending its shareholding beyond 19.9 per cent.

Finance

Nomura's new man The Japanese investment bank Nomura Holdings has continued its expansion into Australia, appointing Peter Meurer local investment banking chairman. Mr Meurer was formerly vice-chairman of Citi Australia.

Mining services

Boart slashes debt Drilling services provider Boart Longyear has slashed its net debt by more than 90 per cent, to less than $110.2 million, after completing a $771.4 million capital raising.

Survey

Business pressed Australian business is still under strong pressure, although rising confidence levels suggest companies are hopeful of a sustained recovery, according to the Australian Chamber of Commerce and Industry-Commonwealth Bank business expectations study for the September quarter.

Armaments

Storm in halt The weapons developer Metal Storm has called a trading halt as it waits for a delayed payment from a foreign investor. The payment was held up due to a public holiday and interbank processes.

Aviation

Simulators for sale Flight Experience Group, a New Zealand flight simulator business put into receivership last week, has been put up for sale. The company makes flight simulators.