Leighton to Raise $757 Million, WA Urges Caution on Woodside Takeover

Marcus Jacob
11 Apr, 2011
New York City

Australian stocks closed higher and the dollar traded at 29-year peak. Western Australia premier urged energy executives to not mount a takeover of Woodside Petroleum. Leighton Holdings is set to raise $757 million in a rights offering.

[R]5:00 PM Sydney – Australian stocks closed higher and the dollar traded at 29-year peak. Western Australia premier urged energy executives to not mount a takeover of Woodside Petroleum. Leighton Holdings is set to raise $757 million in a rights offering.[/R]

Australian stocks edged higher as world markets struggled in the overnight trading on Friday. The Australian dollar traded at 29-year high as expectations of higher commodities exports lifted the trading sentiment.

The ASX 200 index increased 30.60 to 4,971.20 and the All Ordinaries index added 28.4 to 5,064.90.

The Australian dollar edged lower to US$1.0556 and crude oil futures declined 46 cents to US$112.33 a barrel.

Leighton in $757 million Offering

Leighton Holdings in a rights offering estimated to raise $757 million to replenish its balance sheet. The fully underwritten offer of 1 share for every nine held is expected to be managed by UBS AG.

The offering is expected to be priced at $22.50 a share, 22.3% discount to last trading price of $28.94. The offering is fully supported by its largest shareholder, German based Hochtief.

Chief executive David Stewart confirmed the write of $1 billion and revised its estimate loss for the full year to $427 million compared to earlier estimate of net profit of $480 million.

The largest Australian contractor revised lower the value of its Middle East venture The Habtoor Leighton Group by 38% to 525 million from $845 million which was lowered from $1.14 billion.

Stock Movers

BHP Billiton increased 2.6% to $49 after the company issued a statement regarding Woodside Petroleum. The company’s statement noted “market is fully informed of all material information” and it is not aware of the basis of the recent speculation.

Separately, the company also confirmed the completion of buy back of US$10 billion after it purchased US$7.8 billion of shares in Australia and UK.

Rio Tinto Limited increased 2.4% to $88.30 and Newcrest Mining added 0.7% to $42.39.

Woodside Petroleum Limited soared as much as 6% but settled up 2% to $48.16 after the BHP issued the statement. Western Australia premier Collin Stewart urged energy industry executives to keep “hands off Woodside.” He also said he was “directly aware” of takeover moves for the company.

Westpac Banking Corporation increased 0.5% to $24.70 and Macquarie Group Limited declined 0.9% to $35.04. ANZ increased 0.6% to $24.29.