Barrick and Allied Gold, Spotless Offers $556 M

123jump.com Staff
27 Mar, 2008
New York City

January domestic traffic at Qantas increased to 1.35 million and international traffic fell 4.6% to 731,000. Overall traffic in January increased to 3.23 million, up 5.6% from a year ago in the month. AWB Ltd gained 6% after U.S. court dismissed a case against it. Asset manager Babcock & Brown and a consortium of banks agreed to extend $2.8 billion in debt to 2011. Spotless Gold made a $556 million hostile offer for Programmed Maintenance Services Ltd.

[R]3:00AM New York, 7:00PM Sydney – AWB wins a case in the U.S. court and Barrick Gold acquired a 20% stake in a venture with Allied Gold.[/R]

Market Sentiments

ASX 200 index lost 0.2% or 9.8 to close at 5,371.60.

The Preliminary market turnover was 1.54 billion, worth $5.47 billion, with 594 stocks trading up, 523 stocks closing down and 368 unchanged. The most actively traded stock was AFT Corporation with 121.85 million shares worth $123,200.

Market Driver

BHP Billiton Ltd''s chief executive officer Marius Kloppers today revealed that his company was keen on engaging Aluminum Corp of China or Chinalco following its purchase of shares in Rio Tinto which is BHP''s target.

Chinalco and Alcoa Inc paid 6,000 pence a share price paid by for their 9% stake in Rio. Aluminum''s acquisition of a stake in Rio has the potential to offset BHP''s bid. Kloppers said they are seeking to engage Aluminum in the same manner that they are engaging Rio''s top 50 shareholders.

He added that they were pulling all stops to secure total acceptances although they would also be comfortable if they garner at least 50% acceptances which would still give them control.

Chinalco''s support is crucial in BHP''s endeavor to create the largest producer of aluminum and energy coal. Chinalco''s chairman Xiao Yaqing hinted on March 18 that he might increase its stake in Rio to secure the metals needed by China, the biggest consumer of aluminum, copper and iron ore.

BHP gained 1.3% and Rio rose 2.2%.

Gainers and losers

Of the ASX 200 index stocks, Sundance Resource led the gainers with a rise of 23.3% followed by increases in Worleyparsons of 9%, in Timbercorp Ltd of 6.9%, in Aquarius Platinum of 6.5%, and in AED Oil Ltd of 6.2%.

Of the ASX 200 index stocks, Spotless Group led the decliners with a fall of 8.3% followed by losses in Centro Retail Group of 6.5%, in Westfield Group of 5.5%, in JB HI-FI Ltd of 5.3% and in Babcock & Brown of 5.3%.

Qantas carried more passengers on domestic routes

Qantas Airways Ltd airline''s latest traffic figures shows that the airline carried 2.7% more domestic passengers but less international customers in January compared to the year ago in the same month.

Qantas carried 1.35 million domestic passengers in the month, while international passengers fell 4.6% to 731,000. On the whole, the number of passengers carried rose to 3.23 million in January, from January 2007 representing a 5.6% increase.

Qantas said domestic traffic as measured by revenue passenger km rose 2.7% while capacity as measured by available seat km was up 3%.

This resulted in a revenue seat factor of 80.5%, which was 0.2 percentage points lower than January the previous year. International revenue passenger km were down 2.3% and available seat km was also lower by 3.2%, which resulted in revenue seat factor of 87.4%, up 0.8 percentage points on January 2007.

For the travel carrier group in January RPKs rose 4.3%, ASKs were up 3.7% resulting in a revenue seat factor of 84.2%, which was 0.5 percentage points higher than the previous year.

In the financial year to January 2008, group passenger numbers were up 6.6% from the previous year to 23.02 million.

Qantas''s low cost airline Jetstar carried 680,000 domestic passengers in January, up 12.8% on January 2007 while Jetstar International carried 149,000 passengers in January, up 65.7% on the 90,000 carried in the previous corresponding month. Qantas stock closed up 0.3%.

PT Bumi extends Herald Resource takeover offer

Indonesia''s largest coal miner PT Bumi Resources Tbk today announced the extension of its $444.8 million takeover offer for Australian zinc Herald Resources Ltd to April 18 from April 4.

Bumi said in a statement that the conditions contained within its bidder''s statement have not been fulfilled. It added that Herald shareholders who had accepted the offer had the right to withdraw their acceptance within one month of receiving Bumi''s statement.

Ten days ago, Bumi announced that it had not yet finalized debt funding to partially finance the bid, so it extended the deadline for execution of the debt facility to April 4.

Bumi said on March 11 that it was mulling over the future of its bid after Herald backed a rival $505 million offer by Indonesian state-controlled mining group PT Antam Tbk and Chinese government-backed miner Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd.

AWB share benefits from dismissal of lawsuit

Australia''s largest wheat exporter, AWB Ltd''s share gained 5.9% at the close of trade after a U.S. lawsuit that claimed the company depressed global prices after securing a monopoly in Iraq was dismissed.

U.S. Manhattan District Judge Gerard Lynch dismissed the lawsuit on March 25.

The lawsuit, which arose from probes of the United Nations'' Oil-for-Food program that showed that former AWB employees paid kickbacks to the former Iraqi regime of Saddam Hussein in exchange for sales, had sought class-action, or group status, on behalf of U.S. wheat growers.

The ruling gives temporary relief to AWB, which is still facing two remaining class action lawsuits in the U.S. relating to the Iraqi claims.

AWB was stripped in 2006 of its 67-year-old veto over wheat exports from Australia, the world''s sixth-largest exporter of the grain, following an independent inquiry.

Babcock & Brown courts banks to finance debt repayment

International investment and specialized fund and asset management group Babcock & Brown today announces that 25 banks, including all four of the largest banks in Australia, have formally committed to participate in an expansion of the corporate debt facility to $2.8 billion and approved the rollover of the facility to 2011.

In addition, Babcock & Brown had arranged $400 million in new infrastructure asset specific debt facilities, completed $220 million fixed price placement of shares.

Babcock share fell 5.3%.

Barrick Gold Corp to pay $35 million for stake in Allied Gold Ltd

Australian precious metal explorer Allied Gold Ltd today announced that Barrick Gold Corp, the world''s largest gold producer had agreed to pay $35 million for stakes in it and its Tabar Island Group project in Papua New Guinea.

In a statement to the Australian Stock Exchange, Allied said Barrick would pay $20 million for a 70% stake in its gold exploration project in the Pacific Island nation, in addition, Barrick would also pay $15 million for a 4.7% stake in Allied.

Australian property manager, Spotless Gold Ltd today made a $556 million hostile bid for Programmed Maintenance Services Ltd including painting and landscaping contracts.

The cash and stock bid values Programmed shares at as much as $6.11 apiece, 35% higher than yesterday''s closing price. Following 8.3% loss in Spotless, the offer was worth $5.73.

Spotless intends to charge its growth with Programmed 6,000 customers for building maintenance in Australia, New Zealand and the U.K. Chief executive-designate Jo Farnik expects at least $18 million beginning second year after the merger.

Spotless believes that after its talks and agreement with shareholders of Programmed, it has secured support from 13.2% of holders.

Programmed stock rose 15%.