Merger Fever Dominate in Sydney

123jump.com Staff
14 Jan, 2008
New York City

Takover news dominated stock market in Australia today. ASX 200 index lost 0.03% or 1.16 to close at 5,980. Takeover battle heated up as Sinosteel battles for Midwest. In another protracted deal negotiations, Primary Healthcare increased its stake in Symbion to 37.5%. Allegiance Mining is likely to ask shareholders to reject an offer from Zinifex.

[R]3:00AM New York, 7:00PM Sydney - ASX 200 index declined 0.03% due to effects of U.S. economic slow-down.[/R]

ASX 200 index lost 0.03% or 1.6 to close at 5,980.

Midwest Corporation Ltd a takeover target of China''s Sinosteel Corporation said that it is waiting for the confidentiality agreement signed by Sinosteel before releasing accounts. Midwest had agreed to release its financial statements on December 9, 2007.

Midwest said there discussions with Sinosteel had no potential to result in a transaction.

Sinosteel put in a bid of $5.60 cash for each Midwest share, valuing it at $1.19 billion or higher than offered by the rival bid from Murchison Metals for a swap of 1 for every 1.08 stock. Murchison share closed up 7.1%.

Paladin Energy Ltd''s share fell 1% despite the company reporting that it is on track to produce 2.6 million pounds of uranium oxide from its Langer Heinrich mine in Namibia during 2008.

The company produced 650,562 pounds during the first half ending in December 31 against a target of 650,000 pounds.

Production during the December quarter increased to 390,807 pounds of uranium oxide sharply lower than earlier target due to technical problems. The company is still targeting to raise its annual production capacity to 3.7 million pounds.

Primary Health Care Ltd''s increased its stake in its takeover target Symbion Health Ltd to 37.47% from 36.15%.

Primary made a $2.7 billion takeover bid for Symbion which translates to $4.10 per share, which Symbion rejected as too low. Primary''s offer, which was again extended last week, remains open until February 7.

Primary''s current offer is conditional upon achieving acceptances totaling 90 per cent of its target''s shares.

Rival suitor Healthscope with a stake in Primary of 11.91% is still considering to revising its offer.

Allegiance Mining Ltd today indicated that it would make a formal recommendation regarding Zinifex Ltd''s unsolicited takeover offer shortly and reiterated its advice to shareholders to take no action.

The company cited the recent vote of support from its largest shareholder, China''s Jinchuan Group Ltd, as a sign of the strength of the relationship between the companies.

Jinchuan on Friday backed helped in rebuffing Zinifex Ltd''s unsolicited takeover offer, implying in a letter that it would not accept the up to $744.93 million bid.

Zinifex launched an all-cash offer of 90 cents per Allegiance share on December 17 and pledged to increase the bid to $1 per share if it acquired more than 30 per cent of its target, or gained board approval, an offer that Allegiance said was """"opportunistic"""".

Under an off-take agreement, Jinchuan will buy all nickel concentrates produced by Allegiance. The target hopes to start producing nickel at its Avebury project in Tasmania in the first quarter of this year.

MFS Ltd shares rose by 16% today after the group received an $830 million offer from City Pacific Ltd to buy its financial services business. Analysts are looking for a higher bid. The offer values one City Pacific share at $3.70 per share or $1.30 billion.

Woolworths is the first retailer to join the ranks of the top global 25 retailers.

Deloitte 2008 Global Powers of Retailing report identified the 250 largest retailers globally for the year 2006-2007. Woolworths improved its ranking to 25th position from 29th but Coles Group ranking fell to 31st from 30th.

Fairfax regional newspapers in New South Wales may face a journalist strike next week if the demand for 11% pay hike is not met.

The strike was expected to affect the Western Advocate in Bathurst, Dubbo''s The Daily Liberal, the Northern Daily Leader in Tamworth, the Maitland Mercury and the Central Western Daily in Orange.

The Australian dollar rose marginally today on speculation that local rates may be revised higher ahead of the release of inflation data.

At the close, the Australian dollar was trading at $0.8944 against American currency, up from Friday''s close of $0.8940.

Of the ASX 200 index shares, Lynas Corp Limited led the gainers with a rise of 11.6% followed by increases in MFS Limited of 11%, in Toll Holdings Limited of 7.6%, in Asciano Group of 7.5%, and in Murchison Metals of 7.1%.

Of the ASX 200 index stocks, Centennial Coal led the decliners with a fall of 40.4% followed by losses in Sundance Resource of 9.2%, in Flight Centre of 5.5%, in Mincor Resource of 5.4% and in Timbercorp Limited of 5%.