It’s a bumper issue of the Financial Review today –
literally, the words are there on the front cover in red, and the
edition is the last one before 28 December. And aside from exhaustive
Pratt coverage, the paper takes a look at
the year that was, and declares it “the year of the deal-maker and the
financial engineer.” Moreover, with the small exception of the property
consumer sectors, the Fin reckons that if you didn’t get richer this year, “you
weren’t really trying.” Chanitcleer agrees: “it was the year of the financial
engineer.” Macquarie Bank and its clones “brilliantly exploited” historically
low real interest rates born from chronic imbalances in the global economy to
deliver stunning returns to its shareholders. But it wasn’t so good for some.
Steve Vizard is crowned “disgrace of the year,” and Roger Corbett got the prize
for “corporate excess” for the potential $20.8 million coming to the outgoing
Woolworths boss and new RBA board member for
just a year’s work.

Allco Equity Partners yesterday launched a $275 million cash
takeover bid for paint manufacturer Wattyl, reports The Australian, the latest of the new generation of vulture funds targeting sleepy old
industrial companies in need of an overhaul. The hostile takeover is pitched at
$3.25 a Wattyl share, 30 cents a share higher than the company’s close on
Wednesday. Meanwhile, an intriguing battle is going on between consultancy group
Coffey International and a small rump of option-holders in Farsands Solutions,
which was recently acquired by Coffey, writes Bryan Frith. Coffey has been going through the process
of avoiding “greenmailing” – where parties use the leverage attached to a
minority holding to extract an excessive price from another that wants the
benefits of full ownership. And while their concerns are genuine, they
shouldn’t give Coffey the right to “ride roughshod over the option-holders,”
warns Frith.

Depending on your view, either News Corp suffered a setback
in the US courts this week, or the court’s decision to order News to stand
trial over the company’s decision to extend a poison pill plan is a victory of
sorts for institutional shareholder activism, writes Stephen Bartholomeusz in
The Age.
Whatever happens when the case is heard, the activists have already made their
point – that they will hold companies accountable no matter how powerful or
where they’re located, for promises made to shareholders. And they should be applauded
for making a stand on principle. Hopefully, News, and anyone else tempted to
treat their shareholders so contemptuously, will be chastened by the

Virgin Blue is asking shareholders to approve a 33% pay rise
for what is arguably one of corporate Australia’s
more dysfunctional boards, reports The SMH. And the growing hostility between Patrick
Corp boss and airline chairman Chris Corrigan and its 25.1 per cent owner Sir
Richard Branson – which recently spilled out of the boardroom – has not stopped
the airline seeking to enlarge the remuneration pool for non-executive
directors by $250,000 to $1 million a year. And, outsourcing: is it working? asks
Matt O’Sullivan. The answer is complicated – but if you look at the Coles Myer experience,
you’d have to say no.

On Wall Street, US stocks closed at their best levels of the
session overnight, aided by data showing tame inflation, with Dow
components Caterpillar and American International Group marked higher
after being named sector favorites by research firms. The Dow Jones
closed 55.71 points higher at 10,889 – MarketWatch has a full report here.