The market is up 45. The SFE Futures suggested no change in either direction this morning.
The Dow Jones was up 8 – It moved in a narrow 38 point range and closed higher on the back of takeover activity and the oil price falling by more than 4%. Dow Chemical up 4.9% after The Sunday Express in the UK reported it could receive a $50bn buyout offer from private equity. If confirmed, it will be the largest private equity deal in history. Railroads had a good session after Warren Buffett’s Berkshire Hathaway bought a 10.9% stake in Burlington Northern Santa worth about $3.2bn and said it had bought stock in two other railroads but did not disclose which ones. Corporate earnings season begins on Tuesday with Alcoa Inc. kicking off proceedings. The NASDAQ had a quiet night, closing down 0.1%.
Resource doing well today. BHP a bit muted up 5c to 3038c and RIO up 31c to 8064c. Metals mostly down on Friday. Zinifex up 21c to 1592c. Oil price down $2.75 to $61.51. Woodside down 25c to 3879c.
Takeover activity is the go today with Rinker (RIN) receiving and increased bid from Cemex and Gloucester Coal (GCL) an all out bid at a 33% premium from Xstrata. Coles Group (CGJ) just keeps going up with Coles rejecting the WES bid for now as it keeps its options open on other bidders. We have a quiet week ahead of us post Easter break with nothing of major significance to look forward to. The takeover activity continues to be the focus and the media sector hasn’t even begun. Changes to the media legislation took effect last Wednesday and we have yet to see a move.
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- CEMEX has upped its offer for Rinker (RIN) to $US15.85 a share ($19.33) from $US13.00. The revised offer has been unanimously recommended by RIN’s board in absence of a superior proposal. It is now touching the US$15.85-US$17.74 valuation range set by the independent expert’s report. Cemex has agreed to waive all conditions expect the 90% minimum acceptance. RIN is currently in a trading halt; it last traded at 1848c.
- Gloucester Coal (GCL) up 100c or 26.25% to 481c after it received a $391m friendly takeover offer from Xstrata this morning. GCL’s board has unanimously recommended the 475c a share cash offer (33% premium to the one month VWAP) in the absence of a superior offer.
- The AFR reported today that Airline Partners Australia will drop the 90% minimum acceptance level required for its $11bn takeover of Qantas (QAN) after negotiating a new debt financing agreement with lenders. Qantas up 8c to 533c. The bid is at 545c.
- Arrow Energy (AOE) up 7c to 195.5c after announcing improved terms regarding its farm-in deal with Sweden’s EIG. Bonus payments have been upped by $40m to $115m.
- Adelaide Brighton (ABC) up 10c or 2.92% to 353c after UBS Warburg upgrading the stock to a BUY.
- Just Group (JST) up 17c or 3.79% to 466c. Talk is that Solomon Lew might increase his stake to 19% now that he has sold this CGJ stake to Wesfarmers and is cashed up.
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