Tag Archives: Corporate Finance

AMP Australia is close to agreeing a joint venture with Ares: source | Instant News


FILE PHOTOS: The logo of AMP Ltd, Australia’s largest retail wealth manager, adorns their headquarters located in central Sydney, Australia, May 5, 2017. Photo taken May 5, 2017. REUTERS / David Gray

SYDNEY (Reuters) – Australia’s AMP Ltd and former US-based Ares Management applicants are close to agreeing a joint venture that would give American funds control over its asset management business AMP Capital, sources with knowledge of the deal said.

The arrangement, which could be finalized and announced in the next week, will utilize Ares’ distribution network to distribute the AMP investment fund, the person said, asking not to be named because negotiations are private.

The AMP representative, who on February 11 said Ares had withdrawn a A $ 6.36 billion ($ 5.03 billion) takeover offer for the entire company, declined to comment.

Ares’ representatives also declined to comment when contacted by Reuters.

Bloomberg reported on Tuesday that the deal could value the asset management business more than A $ 3 billion and that AMP would retain a minority stake, citing people with knowledge of the matter.

Following a review in the past six months seeking to find a buyer for AMP as a whole or its unit, the Sydney-based company said last week it had closed all but one process.

Its Australian and New Zealand wealth management business and banking division, are no longer under review but will continue to negotiate with Ares about potential sales or partnerships involving AMP Capital.

The deals are uncertain, said Chief Executive Francesco De Ferrari at the time.

($ 1 = 1.2653 Australian dollars)

Reporting by Paulina Duran in Sydney; Edited by David Evans

.



image source

The US asked Australia to overturn a proposed law to make Facebook, Google pay for news | Instant News


SYDNEY (Reuters) – The US government has asked Australia to overturn a proposed law that would make it the first country in the world to coerce Facebook Inc and Alphabet Inc. Google to pay for news that is sourced from local media.

In a submission calling for the government to “suspend” the plan, assistant US trade representatives Daniel Bahar and Karl Ehlers advised Australia to “learn more about the market and, where appropriate, develop a voluntary code”.

Under the law, which has broad political support and currently stands before a senate committee, Google and Facebook will be subject to mandatory price arbitration if a commercial agreement on payments to Australian media cannot be reached.

“The US government is concerned that attempts, through legislation, to regulate the competitive position of certain players … clearly detrimental to two US companies, could lead to dangerous results,” the document said, under the letterhead of the Executive Office of the President.

Such a move could also “raise concerns regarding Australia’s international trade obligations,” he said.

The Australian government announced the legislation last month after an investigation found the tech giant wields too much market power in the media industry, a situation it says poses a potential threat to a well-functioning democracy.

Asked for response to the US submission, Australian Treasurer Josh Frydenberg said in a statement that the government was “committed to proceeding with a mandatory code” that would address “the imbalance of bargaining power with digital platforms and media companies.”

The code follows an 18-month review by the Chair of the Australian Competition and Consumers Commission (ACCC) and “extensive consultations” covering the views of Google and Facebook, he added.

An ACCC investigation found that for every A $ 100 spent on online advertising, A $ 53 goes to Google, A $ 28 goes to Facebook and A $ 19 goes to other media companies.

Following intense but unsuccessful lobbying by the Australian governments of the two tech giants to overturn proposed laws, which they deem unfair, Google and Facebook suggested they may be forced to limit their offerings in the country.

($ 1 = 1.3014 Australian dollars)

Reporting by Paulina Duran in Sydney; Edited by Richard Pullin

.



image source

Silver Lake in talks for stake in New Zealand All Blacks – source | Instant News


FILE PHOTO: Tattoo sleeve of New Zealand All Blacks player seen during their training session in Urayasu, east of Tokyo, Japan November 1, 2018. REUTERS / Issei Kato

SYDNEY (Reuters) – US private equity firm Silver Lake is in further talks to acquire a minority stake in the commercial activities of New Zealand Rugby, the home of the world-renowned All Blacks team, sources familiar with the negotiations told Reuters.

The potential deal is for “up to 15%” of the three-time Rugby World Cup winners, the source said, asking not to be named because negotiations are private.

The talks with Silver Lake were first reported by Sky News, which said a deal for a 15% stake would cost the team an estimated $ 2 billion. Sky said a deal had yet to be concluded, but could be announced as soon as this month.

An investment in one of the world’s most famous sports brands will expand the company’s portfolio of $ 75 billion in buying giants, most of which are tech and sports venues and teams, according to its website.

A representative from Silver Lake declined to comment.

Charlotte McLauchlan, Communications Director for Rugby New Zealand, told Reuters the organization “is on track to see what partner investors look like for New Zealand Rugby – which is a very attractive prospect for us”.

He declined to comment further.

Last year, Rugby New Zealand launched a review of how the game in a rugby-mad country is run and financed, saying it could include private equity investment.

In 2019, the California-based company acquired a 10% stake in City Football Group (CFG), which owns defending English Premier League champions Manchester City and teams in the United States, Australia and China.

Reporting by Paulina Duran in Sydney. Additional reporting by Praveen Menon in Wellington; Edited by

.



image source

Westpac is teetering by spending needs as Australian banks adjust to the economic pandemic | Instant News


SYDNEY (Reuters) – Westpac Banking Corp. WBC.AX Its rivals are lagging behind as a dated system forces it to spend, rather than save, while profit margins were eroded by record low interest rates, investors said after Australia’s biggest bank issued revenue and trade renewals.

FILE PHOTO: A woman exits the ground floor of an office building bearing the Westpac logo amid easing restrictions on coronavirus disease (COVID-19) in the Central Business District of Sydney, Australia, 3 June 2020. Image taken 3 June 2020 REUTERS / Loren Elliott

Extensive organization, aging software, and convoluted procedures have been Westpac’s main enemies, investors said, leading to heavy fines for violating anti-money laundering laws and loss of market share in the mortgage, its main product.

That has made the 203-year-old lender prioritize expensive restructuring and system upgrades over loan growth.

Cheap Westpac stock makes it attractive to investors. However, few are convinced of the rapid rise in prices given the central bank has cut interest rates three times to help the post-pandemic economic recovery, squeezing bank interest margins.

“The question the market is asking itself is: is it cheap enough?” said portfolio manager Matthew Ryland at Greencape Capital, an investor in all of Australia’s “Big Four” banks.

Westpac has assets of more than A $ 900 billion ($ 650 billion) and was for many years the second largest bank by market value. After seeing its share price drop 28% since the breach surfaced a year ago, it was passed last month by National Australia Bank Ltd (NAB) NAB.AX.

The bank’s shares are now valued at 0.89 times their book value, the second lowest of the Big Four, according to data from Refinitiv Eikon. In comparison, several Commonwealth Bank of Australia (CBA) leaders CBA.AX is 1.7.

“Westpac has had a bad year, but there could be some gains relative to other banks,” said Hugh Dive, chief investment officer at Atlas Funds Management, which also owns Westpac shares.

In its annual earnings report, Westpac said it was working to restore market share in mortgages after caution was combined with the inefficiency of sending prospective borrowers elsewhere.

New management since then and a cost-focused strategy scheduled for May have also given hope for a revival, albeit gradually.

“Westpac is 12 to 18 months behind peers when it comes to gaining control of the cost-out program,” said Ryland of Greencape.

Westpac declined to comment.

UBS, which has a “buy” recommendation on Westpac shares, in a client note said all banks should spend money on IT, compliance and other business enhancements because of COVID-19, but Westpac’s cost challenges are greater.

The average recommendation for the Westpac stock of 14 analysts is 2.5, of which 2 is “buy”, 3 is “hold” and 4 is “sell”.

Their top choice is NAV at 2 followed by Australia and New Zealand Banking Group Ltd ANZ.AX at 2.1, Refinitiv Eikon data show.

CBA, widely considered to have better cost control and IT infrastructure, was rated 3.4, reflecting its higher price tag.

($ 1 = 1.3845 Australian dollars)

Reporting by Paulina Duran in Sydney; Edited by Christopher Cushing

.



image source

Westpac is teetering by spending needs as Australian banks adjust to the economic pandemic | Instant News


SYDNEY (Reuters) – Westpac Banking Corp. WBC.AX Its rivals are lagging behind as a dated system forces it to spend, rather than save, while profit margins were eroded by record low interest rates, investors said after Australia’s biggest bank issued revenue and trade renewals.

FILE PHOTO: A woman exits the ground floor of an office building bearing the Westpac logo amid easing restrictions on coronavirus disease (COVID-19) in the Central Business District of Sydney, Australia, 3 June 2020. Image taken 3 June 2020 REUTERS / Loren Elliott

Extensive organization, aging software, and convoluted procedures have been Westpac’s main enemies, investors said, leading to heavy fines for violating anti-money laundering laws and loss of market share in the mortgage, its main product.

That has made the 203-year-old lender prioritize expensive restructuring and system upgrades over loan growth.

Cheap Westpac stock makes it attractive to investors. However, few are convinced of the rapid rise in prices given the central bank has cut interest rates three times to help the post-pandemic economic recovery, squeezing bank interest margins.

“The question the market is asking itself is: is it cheap enough?” said portfolio manager Matthew Ryland at Greencape Capital, an investor in all of Australia’s “Big Four” banks.

Westpac has assets of more than A $ 900 billion ($ 650 billion) and was for many years the second largest bank by market value. After seeing its share price drop 28% since the breach surfaced a year ago, it was passed last month by National Australia Bank Ltd (NAB) NAB.AX.

The bank’s shares are now valued at 0.89 times their book value, the second lowest of the Big Four, according to data from Refinitiv Eikon. In comparison, several Commonwealth Bank of Australia (CBA) leaders CBA.AX is 1.7.

“Westpac has had a bad year, but there could be some gains relative to other banks,” said Hugh Dive, chief investment officer at Atlas Funds Management, which also owns Westpac shares.

In its annual earnings report, Westpac said it was working to restore market share in mortgages after caution was combined with the inefficiency of sending prospective borrowers elsewhere.

New management since then and a cost-focused strategy scheduled for May have also given hope for a revival, albeit gradually.

“Westpac is 12 to 18 months behind peers when it comes to gaining control of the cost-out program,” said Ryland of Greencape.

Westpac declined to comment.

UBS, which has a “buy” recommendation on Westpac shares, in a client note said all banks should spend money on IT, compliance and other business enhancements because of COVID-19, but Westpac’s cost challenges are greater.

The average recommendation for the Westpac stock of 14 analysts is 2.5, of which 2 is “buy”, 3 is “hold” and 4 is “sell”.

Their top choice is NAV at 2 followed by Australia and New Zealand Banking Group Ltd ANZ.AX at 2.1, Refinitiv Eikon data show.

CBA, widely considered to have better cost control and IT infrastructure, was rated 3.4, reflecting its higher price tag.

($ 1 = 1.3845 Australian dollars)

Reporting by Paulina Duran in Sydney; Edited by Christopher Cushing

.



image source