Tower Australia Recommends $1.76 billion Dai-ichi Life Offer

Chandrasekhar Atreya
29 Dec, 2010
New York City

Australian stock index closed flat as miners fell despite a rise in precious metals prices. Tower Australia recommended $1.76 billion takeover offer from Dai-ichi Life. Rains bring down coal production in Australia and Darlymple Bay Coal terminal suspends operations.

[R]6:00 PM Sydney, Australia – Australian stock index closed flat as miners fell despite a rise in precious metals prices. Tower Australia recommended $1.76 billion takeover offer from Dai-ichi Life. Rains bring down coal production in Australia and Darlymple Bay Coal terminal suspends operations.[/R]

Sydney stock market closed flat with miners and banks dragging the index on the first day after three-day Christmas holidays.

The ASX 200 Index declined 2.10 to close at 4,775.20.

The Australian dollar stayed above parity and closed at 1.0109 U.S cents in Sydney today and the dollar has been on the rise the longest since 2008.

Tower Australia recommended Dai-ichi Life Insurance’s takeover offer of $1.76 billion lifting the stock in trading 42%.

The Japanese life insurer has offered Tower Australia Group shareholders $4.00 a share for each share that Dai-ichi does not own. Dai-ichi currently owns 29% of Tower shares.

Australian property market was one of the stronger housing markets in the world during 2010, a new research survey showed.

Home prices in 12 advanced economies in 2010 remained flat in Germany and the United States and increased in Australia, Canada, France, Sweden, Switzerland and the United Kingdom, according to The Global Real Estate Trends report released by Canada based Scotia Bank.

Record rainfall in Queensland which led to flooding and damage to properties and other assets is expected to cost more than A$1 billion and is estimated to lead to large-scale spike in insurance claims and disaster relief.

Dalrymple Bay Coal terminal suspended operations as stockpiles of coal have run too low following a train derailment led disruption of supplies and heavy rains.

Leighton Holdings confirmed today its Indian subsidiary Leighton International sold its 35% stake in the infrastructure sector in India to local conglomerate Welspun Corp Ltd for $104 million.

Leighton will keep its 65% stake in the subsidiary, said that the transaction would generate $80 million in cash and a gain of about $200 million.

Indonesian resources company PT Bayan Resources Tbk finalized a controlling stake in Kangaroo Resources of Australia in a A$277 million deal.

After the deal, PT Bayan will hold 57% stake in the Perth-based coal miner, which also has base metals and gold interests in Australia. The agreement is subject to due diligence in the next 30 days, approval from Kangaroo shareholders and regulatory agencies.

Stock Movers

Tower Australia Group shares surged 41.75% to A$3.87 after Dai-ichi takeover offer was recommended by the directors of the company.

Lynas Corp shares gained 10.8% to A$1.795 after China announced its first round of export quota restrictions on rare earth minerals for 2011.

BHP Billiton lost 1.28% or 59 cents to close at A$45.45 and rival Rio Tinto Ltd dropped 1.02% or 88 cents to A$85.48.

The ANZ Banking Group gained 1 cent to close at A$23.73 and Westpac Banking Corp added 6 cents to A$22.71.

National Australia Bank Ltd lost 8 cents or 0.33% to close at A$24.02 and Commonwealth Bank of Australia gained 16 cents to close at A$51.27.