Australia Down 2.5%, Lion Nathan Bid Rejected

123jump.com Staff
17 Nov, 2008
New York City

Stocks in Australia fell 2.5% following declines in New York trading. Commodities and energy stocks led the fall. Australia retail sales in September rose 0.1%, less than expected as consumers tighten their wallets. Money market rates in Sydney trading after RBA pumped A$1.7 billion in liquidity.

[R]3:00AM New York, 7:00PM Sydney- Australia’s retail sales increase by less-than- forecasted 0.1% in September quarter. Coca-Cola Amatil rejects Lion Nathan''s A$7.6 billion offer as too low.[/R]

Australian market averages fell to a four-year low as investor sentiment remained subdued after Wall Street closed down on Friday last week. Financial and commodity stocks slid.

In Sydney trading ASX 200 fell 2.5% or 95.1 to 3,653.00.

Of the ASX 200 index stocks 37 increased, 156 declined, and 7 were unchanged. Coca-Cola Amatil led advancers in the index shares with a rise of 12.9% after the company rejected A$7.6 billion bid from Lion Nathan as too low.

Australia Retail Sales Rise 0.1% in September Quarter

Australian Bureau of Statistics reported today that the seasonally adjusted trend volume measure of retail turnover gained 0.1% in the September quarter.

Trend estimate of turnover for the Australian Retail series rose 0.5% in the three months to September after rising 0.5% in June and 0.8% in March.

All industries had an increase in the trend, except household good retailing falling 0.4% and cafes, restaurants and takeaway food services declining 0.6%. Food retailing gained 1.2% and department stores sales advanced 0.8%.

ABS said states that had the largest increase include Northern Territory with gains of 2.5%, South Australia up 2.1% and Tasmania rising 2%. The seasonally adjusted estimate of turnover for the Australian retail series edged up 0.8% in the quarter ended September.

Australian Money Market Rates Fall

The Australian interbank rate for three–month loans and overnight indexed swap rate fell to 32 basis points from 42 basis points on Friday last week.

Reserve Bank of Australia today pumped A$1.68 billion into the money market after forecasting a deficit of A$2 billion.

The Australian dollar increased to 64.90 American cents.

Gainers & Losers

Coca- Cola Amatil led gainers in the ASX 200 index shares with a rise of 12.9% followed by increases in Macquarie Countrywide of 8.1%, in Energy Resources Australia of 7%, in Brambles Ltd. of 5.3%, and Goodman Group of 5.1%.

Coca- Cola Amatil rose after the company rejected A$7.6 billion takeover bid from Lion Nathan as insufficient.

Resources stocks advanced after gold prices increased $37.50 to $742.5 per ounce. Equinox Mine soared 2.6% and Rio Tinto increased 2%.

Asciano Group led decliners in the ASX 200 index shares with a fall of 17.1% followed by losses in Kingsgate Consolidated of 15.4%, in Macquarie Media of 14.8%, in Babcock & brown of 14.6%, and Atlas Iron Ltd. of 13.6%.

Wachovia to Recall Loan to Babcock& Brown

Babcock & Brown reported today that U.S. lender Wachovia may recall a US$112 million loan to the Babcock & Brown/ GPT joint venture after failing to provide the additional collateral requested by the bank.

Babcock & Brown/GPT joint venture exposure to the recall is restricted to the equity invested in HTM, including retained earnings, valued at US$82 million, which is 4% of the JV''s ordinary & preferred equity.

Babcock & Brown''s total exposure to any potential loss will be equivalent to 50% of the joint venture''s exposure or US$41 million.

Coca- Cola Amatil Rejects Offer from Lion Nathan

Coca-Cola Amatil reported today that the A$7.6 billion takeover bid by Australia''s brewer Lion Nathan on November 7 is “incomplete and non-binding”.

Lion Nathan is offering A$6.15 and 0.469 Lion Nathan share per share and giving stakeholders the alternative to accept more or less cash or shares.

The offer is 25% premium to Coca-Cola Amatil’s A$8.25 closing share price on Friday last week.

Macquarie Capital is advising Coca-Cola Amatil on the deal.

The Australian brewer says benefits from the merger will be A$100 million to A$130 million per year.

According to the Australian online reports, Kirin Holdings, which owns 46% equity in Lion Nathan, says it could sell National Foods and Dairy Farmers operations into a merged group.