Centro and BHP tilts, Allco, Babcock, AWB, Woolies, Rupert and ex CEOs
February 18, 2010
Dear Mayne Reporters,
Here is a juicy nine item edition, with plenty of links to other interesting material:
Centro board tilt
The Centro Retail board tilt has been lodged and accepted so it's game on. The days of the mirror boards at the two listed Centro vehicles are over, if the proxy advisers and shareholders agree that Centro Retail needs some directors independent of its manager. At least they'll have an option for the first time this year and it will interesting to see if Centro Retail can scramble some new independent directors of their own together before the notice of meeting goes out.
Babcock unravels
It's the beginning of the end for Babcock and Brown with its listed fund model unravelling. Babcock & Brown Communities has today proposed paying a $17 million internalisation fee, whilst putting itself up for sale. Why should BBC pay anything? This all ties in with ASX board tilt which demands disclosure of the full management contracts for all these Babcock and Macquarie vehicle. What does the fine print say about termination provisions? Bartho has some good early comment on Business Spectator, whilst Fairfax's Michael West is a bit over the top predicting trouble for Macquarie, although the yarn is rating highly on www.Kwoff.com this afternoon.
BHP board tilt video
BHP-Billiton shareholders who want to send a message to chairman Don Argus will have an avenue at the two forthcoming AGMs in London and Melbourne thanks to the first ever outside board tilt for The Big Australian, which is explained in this video.
AWB victory edges closer
AWB constitutional reform is looking more likely by the day with John Anderson's statement in support today a major milestone given he created the farmer gerrymander in the first place. We'll know the final votes by September 3 but Anderson's public position is a slap in the eye for the Cold War warriors trying to retain farmers having 9 of the 12 board seats. That said, the 74.7% in favour before last week's vote extension will still be hard to move, given each extra against vote requires three offsetting for votes.
A meeting with Allco - my shout
I'm meeting with Allco Finance Group CEO David Clarke for a pre-AGM chat next week. The policy on these situations is to disclose contact but not the contents of any private discussions. Having invested $3000 into Allco Equity Partners at $1.63 last month, it was good to see David Coe quit the board yesterday when the latest results were released. The stock jumped 16c yesterday and a further 8c today, so I just sold out at 3.55pm for $1.94 a pop, crystallising a tidy $590 profit. However, it won't necessarily be my shout as I'm still about $3000 down on all the other Allco-related vehicles.
Giving Woolies heaps
Woolies copped plenty over the past 48 hours as you can see from all the following links on our home page:
* Read Tuesday's Crikey story on the Woolies profit.
* Listen to interview on 4BC Brisbane with Mike Smith.
* Check out www.pokiewatch.org which lays bare the shameless Woolies approach.
* Listen to pokies billionaire Bruce Mathieson call me a liar on 3AW in 1997.
* Listen to discussion of Woolworths profit on ABC Sydney with Deborah Cameron and ABC Melbourne interview with Lindy Burns.
* Read Nick Xenophon's extraordinary speech to Woolies and the other pokies players last Sunday.
In terms of figures that highlight the way Woolies abuse power, this is how the negative stock figure has grown on its balance sheet over the past five years:
2003-04: -$326m
2004-05: -$360m
2005-06: - $1.25bn
2006-07: -$1.44bn
2007-08: -$1.8bn
Pushing out supplier terms to the extent where Woolies now has $4.8 billion in payables and only $3 billion in inventories on its balance sheet, just demonstrates brutal market power at work. The joint has become a virtual supermarket.
Departed CEOs list
Check out this list of all the major company CEOs who have left over the past 12 months. I doubt we've seen turnover at the top quite like this ever before.
Rupert and the Melbourne Writers Festival
If you're around in Melbourne tomorrow, why not come to the 10am session at the Melbourne Writers Festival where former ABC radio presenter Peter Clarke, The Monthly's editor Sally Warhaft and your truly spend will spend an hour with Bruce Dover dissecting his wonderful book, Rupert's Adventures in China.
To bone up, check out this fascinating recent speech by Rupert Murdoch at Georgetown University, plus these earlier ABC radio and Mayne Report video chats with Dover, Murdoch's former point man in China.
A response from Macquarie
Millionaires Factory spinner Paul Gregory have requested this be run in response to the previous edition and our comments on fees drawn from Macquarie Communications Infrastructure Group:
Stephen,
Your references to Macquarie Communications Infrastructure Group (MCG) in this afternoon's Mayne Report contained inaccuracies and I would appreciate this response being published in full.
Net loss
You reported that MCG had 'reported a bottom line loss of $103 million after taking a $649 million hit on its exchangeable interest rate swaps'.
As you would know, and as was set out at the results presentation, swap and exchangeable bond revaluations are of a non-cash nature and do not impact cash flow. In the case of the swaps, it is MCG's belief that they represent the accounting outcome of what is a prudent hedging policy.
Fees
You reported that MCG had paid Macquarie 'not much more than $50 million in fees' for the year to 30 June 2008. As part of this section of your report, you referred to your former article in October 2007, which claimed that MCG had paid $175 million in fees to Macquarie.
We responded to the October 2007 piece at the time, pointing out that MCG's fees are paid in proportion to its investment in the relevant businesses. The fees paid by MCG to Macquarie in the 2006/07 financial year were therefore substantially less than $175 million, which was the total fee paid by all investors in the relevant businesses. You published our response on that occasion and should have done so again today or, preferably, not repeated the error.
In any event, you have repeated the error again for 2007/08. MCG has not paid Macquarie '... more than $50 million in fees". Again, MCG's fees are paid in proportion to its investment in the relevant businesses with the remainder of the fees paid by MCG's co-oinvestors, in proportion to their interests.
Accordingly MCG paid less than $50 million in the 2007/08 financial year, having met 48% of the cited fee paid by Arqiva, 48% of the fee paid by NGW and 36.7% of the fee paid by Global Tower Partners (GTP).
Finally we would note, as we did in October 2007, that all the fees go through external benchmarking, are subject to approval by independent directors and in the case of Arqiva are approved by the appointed directors of minority i.e. non-Macquarie shareholders.
That's all for now.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
Here is a juicy nine item edition, with plenty of links to other interesting material:
Centro board tilt
The Centro Retail board tilt has been lodged and accepted so it's game on. The days of the mirror boards at the two listed Centro vehicles are over, if the proxy advisers and shareholders agree that Centro Retail needs some directors independent of its manager. At least they'll have an option for the first time this year and it will interesting to see if Centro Retail can scramble some new independent directors of their own together before the notice of meeting goes out.
Babcock unravels
It's the beginning of the end for Babcock and Brown with its listed fund model unravelling. Babcock & Brown Communities has today proposed paying a $17 million internalisation fee, whilst putting itself up for sale. Why should BBC pay anything? This all ties in with ASX board tilt which demands disclosure of the full management contracts for all these Babcock and Macquarie vehicle. What does the fine print say about termination provisions? Bartho has some good early comment on Business Spectator, whilst Fairfax's Michael West is a bit over the top predicting trouble for Macquarie, although the yarn is rating highly on www.Kwoff.com this afternoon.
BHP board tilt video
BHP-Billiton shareholders who want to send a message to chairman Don Argus will have an avenue at the two forthcoming AGMs in London and Melbourne thanks to the first ever outside board tilt for The Big Australian, which is explained in this video.
AWB victory edges closer
AWB constitutional reform is looking more likely by the day with John Anderson's statement in support today a major milestone given he created the farmer gerrymander in the first place. We'll know the final votes by September 3 but Anderson's public position is a slap in the eye for the Cold War warriors trying to retain farmers having 9 of the 12 board seats. That said, the 74.7% in favour before last week's vote extension will still be hard to move, given each extra against vote requires three offsetting for votes.
A meeting with Allco - my shout
I'm meeting with Allco Finance Group CEO David Clarke for a pre-AGM chat next week. The policy on these situations is to disclose contact but not the contents of any private discussions. Having invested $3000 into Allco Equity Partners at $1.63 last month, it was good to see David Coe quit the board yesterday when the latest results were released. The stock jumped 16c yesterday and a further 8c today, so I just sold out at 3.55pm for $1.94 a pop, crystallising a tidy $590 profit. However, it won't necessarily be my shout as I'm still about $3000 down on all the other Allco-related vehicles.
Giving Woolies heaps
Woolies copped plenty over the past 48 hours as you can see from all the following links on our home page:
* Read Tuesday's Crikey story on the Woolies profit.
* Listen to interview on 4BC Brisbane with Mike Smith.
* Check out www.pokiewatch.org which lays bare the shameless Woolies approach.
* Listen to pokies billionaire Bruce Mathieson call me a liar on 3AW in 1997.
* Listen to discussion of Woolworths profit on ABC Sydney with Deborah Cameron and ABC Melbourne interview with Lindy Burns.
* Read Nick Xenophon's extraordinary speech to Woolies and the other pokies players last Sunday.
In terms of figures that highlight the way Woolies abuse power, this is how the negative stock figure has grown on its balance sheet over the past five years:
2003-04: -$326m
2004-05: -$360m
2005-06: - $1.25bn
2006-07: -$1.44bn
2007-08: -$1.8bn
Pushing out supplier terms to the extent where Woolies now has $4.8 billion in payables and only $3 billion in inventories on its balance sheet, just demonstrates brutal market power at work. The joint has become a virtual supermarket.
Departed CEOs list
Check out this list of all the major company CEOs who have left over the past 12 months. I doubt we've seen turnover at the top quite like this ever before.
Rupert and the Melbourne Writers Festival
If you're around in Melbourne tomorrow, why not come to the 10am session at the Melbourne Writers Festival where former ABC radio presenter Peter Clarke, The Monthly's editor Sally Warhaft and your truly spend will spend an hour with Bruce Dover dissecting his wonderful book, Rupert's Adventures in China.
To bone up, check out this fascinating recent speech by Rupert Murdoch at Georgetown University, plus these earlier ABC radio and Mayne Report video chats with Dover, Murdoch's former point man in China.
A response from Macquarie
Millionaires Factory spinner Paul Gregory have requested this be run in response to the previous edition and our comments on fees drawn from Macquarie Communications Infrastructure Group:
Stephen,
Your references to Macquarie Communications Infrastructure Group (MCG) in this afternoon's Mayne Report contained inaccuracies and I would appreciate this response being published in full.
Net loss
You reported that MCG had 'reported a bottom line loss of $103 million after taking a $649 million hit on its exchangeable interest rate swaps'.
As you would know, and as was set out at the results presentation, swap and exchangeable bond revaluations are of a non-cash nature and do not impact cash flow. In the case of the swaps, it is MCG's belief that they represent the accounting outcome of what is a prudent hedging policy.
Fees
You reported that MCG had paid Macquarie 'not much more than $50 million in fees' for the year to 30 June 2008. As part of this section of your report, you referred to your former article in October 2007, which claimed that MCG had paid $175 million in fees to Macquarie.
We responded to the October 2007 piece at the time, pointing out that MCG's fees are paid in proportion to its investment in the relevant businesses. The fees paid by MCG to Macquarie in the 2006/07 financial year were therefore substantially less than $175 million, which was the total fee paid by all investors in the relevant businesses. You published our response on that occasion and should have done so again today or, preferably, not repeated the error.
In any event, you have repeated the error again for 2007/08. MCG has not paid Macquarie '... more than $50 million in fees". Again, MCG's fees are paid in proportion to its investment in the relevant businesses with the remainder of the fees paid by MCG's co-oinvestors, in proportion to their interests.
Accordingly MCG paid less than $50 million in the 2007/08 financial year, having met 48% of the cited fee paid by Arqiva, 48% of the fee paid by NGW and 36.7% of the fee paid by Global Tower Partners (GTP).
Finally we would note, as we did in October 2007, that all the fees go through external benchmarking, are subject to approval by independent directors and in the case of Arqiva are approved by the appointed directors of minority i.e. non-Macquarie shareholders.
That's all for now.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.