Canada Pension to Buy Australia based Intoll

Chandrasekhar Atreya
27 Aug, 2010
New York City

Stocks in Australia rallied to gain modestly. Availability of residential rental property rises in Sydney to a 12-month high. Canadian Pension Board agrees to buy Intoll for A$ 3.44 billion. Newcrest Mining gets closer to acquiring Lihir Gold.

[R]6:00 PM Sydney, Australia – Stocks in Australia rallied to gain modestly. Availability of residential rental property rises in Sydney to a 12-month high. Canadian Pension Board agrees to buy Intoll for A$ 3.44 billion. Newcrest Mining gets closer to acquiring Lihir Gold.[/R]

Australian stocks traded marginally lower at noon Friday with banks and mining stocks facing selling following a weak trading in the U.S. The market edged into positive territory in afternoon after opening 0.8% lower with consumer staples and financials leading the gainers.

The benchmark ASX 200 closed up 14.1 points or 0.32% at 4,370.10. The index fell 1.4% for the week, the third consecutive weekly decline.

The number of rental properties available in Sydney rose to a near 12-month high during July, according to the Real Estate Institute of NSW. But the number of properties available fell slightly in Newcastle and remained almost unchanged in Wollongong. Rental vacancy rates across NSW as a whole are little changed from July 2009.

Intoll Group directors recommended an enhanced takeover bid from the Canadian Pension Plan Investment Board that values the toll road investor at A$3.44 billion.

Canada Pension Plan Investment agreed with the company and valued the Intoll stocks at A$1.52 each, a 36% premium over its initial approach on July 15.

The deal gives the Canadian fund a 30% stake in the 407 ETR near Toronto, and follows its failure earlier this year to buy toll-road operator Transurban Group.

Harvey Norman reported profit after tax of A$290.4 million for the year 2009-10, just shy of market expectations, and the company estimated positive earnings growth in the current year.

Lihir Gold Friday announced first half net profit of $87.1 million and said full year production would be around 1 million to 1.1 million ounces of gold.

Newcrest Mining Ltd’s $10.65 billion takeover of Lihir Gold Ltd got a boost after a Papua New Guinea court approved the deal. Newcrest welcomed the move, which it said was the final step in the merger process after Lihir shareholders voted overwhelmingly in favor of the deal earlier this week.

Merger transaction is expected to be completed on September 13, with Lihir shares suspended from trading on the Australian Securities Exchange and the Port Moresby Stock Exchange from Monday, August 30. Under the scheme Lihir shareholders will receive nearly 0.12 Newcrest shares plus 22.5¢ for each Lihir share they own.

Gold producer Troy Resources reported a loss of A$6.7 million for the year ended June compared with a profit of A$16.7 million a year earlier. The company expects its Casposo gold and silver mine in Argentina to begin production in September.

Engineering and facilities management company UGL Ltd said it finalized a $600 million public-private partnership with Singapore Sports Council to maintain the Singapore Sports Hub.

The 25-year contract is for facilities management of the Singapore Indoor Stadium and the remaining Greenfield Singapore Sports Hub venues, which are due for completion in 2014.

Uranium producer Paladin Energy improved its 2010 fiscal year net loss to $52.9 million and said total uranium oxide production reached a record, increasing by 60% over the prior years output.

Glencore said it plans to spin off or list its gold assets after reporting a surge in first half profits and estimated the assets worth of at least $5 billion.

Citigroup and UBS upgraded their recommendations on Ramsay Health Care after the release of the recent full-year results.

Resource News

Mineral deposits said it will acquire 15% of Oromin Exploration and will issue 24.87 million shares as consideration at 93¢ a share.

An aboriginal corporation signed a native title agreement with Hancock Prospecting to cover a proposed railway line to carry iron ore from its Roy Hill project to Port Hedland. The agreement with the Kariyarra native title group is designed to protect cultural heritage sites throughout the planning and construction of the rail corridor in the Pilbara region.

Hancock is planning a A$7 billion, 300 kilometer railway line with associated port facilities to export 55 million tons of iron ore from Roy Hill.