BHP Billiton has threatened to pull out of its $9.2 billion bid for WMC Resources if it doesn’t win control within the next week, reports James Chessell in the SMH. In an attempt to put an end to the six-month battle for control of the country’s biggest independent mining house, BHP yesterday declared it would not extend its $7.85 a share offer beyond June 3. The most likely scenario now is that BHP will have received more than 50% acceptances by next week, says Elizabeth Knight in the SMH. It’s an offer that any sensible WMC shareholder should jump at.
BHP has thrown down the gauntlet to Rio Tinto – put up or shut up, says Robert Gottliebsen in The Australian. It’s now unlikely Rio will make a WMC bid. The hedge funds that effectively control the company cannot risk big losses, and so are likely to deliver control of WMC to BHP as the June 3 deadline approaches. And BHP had to do something to stop hedge funds and other professional investors from treating its $7.85 a share offer price as a put option, which underwrote a punt on either a higher offer from Rio Tinto or an increase from BHP to induce acceptances, says Bryan Frith in The Oz.
Meanwhile the Foster’s group has begun a radical overhaul of its business structure, management and sales teams after smashing through the 90% barrier to take control of Southcorp, reports The Age. Yesterday was a red-letter day, not just for Foster’s Group but for the economy, says Stephen Bartholomeusz in the Smage. Foster’s has created something unique – the only Australian consumer products company with global category leadership.
Specialist investment bank Babcock & Brown has upgraded its profit forecast for the second time in three months, setting an upbeat tone before today’s AGM and next week’s contentious vote on the General Property Trust joint venture, reports Robert Clow in the Oz. And Zurich Australia has admitted to deliberately overstated its profits by $61 million using financial reinsurance and knowingly misleding the regulator, reports The Oz. Visy, a major supplier of cans to the local food industry, is threatening to take BlueScope Steel to the ACCC for abuse of market power after BlueScope signalled its intention to implement a 39 per cent price rise for tin plate from July 1, report The Age.
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While David Jones is eyeing the first day of winter for what was once its end-of-winter sale, Myer is pondering a winter clearance before autumn finishes, reports the SMH. Amid concerns about a slowing economy and falling spending, the retail giants are preparing to kick off their big sales next week.
Crude oil futures prices edged above $51 a barrel overnight after an unexpected drop in U.S. crude inventories ahead of the summer driving season rattled markets, reports the Washington Post. And on Wall Street, US stocks ended higher overnight as an upward revision in first-quarter economic data strengthened investors’ confidence. The Dow Jones finished up 79 points at 10,537 – its highest level in more than six weeks. Marketwatch has a full report here.