Macquarie fee bonanza, Aristocrat, BHP tilt, foreign lists, Alex offer and Bradken SPP win
February 2, 2010
Dear Mayne Reporters
Kevin McCann's Macquarie fee bonanza
Macquarie Group shares have soared 11% today and this is not only because of the bailout of Freddie and Fannie and subsequent 3% surge in the All Ords.
Origin Energy's huge deal with ConocoPhillips must be a big factor because the Millionaire Factory will pocket a very fat fee of potentially more than $100 million for its advice that sent the Origin share price surging $1.95 to a record $17.60 in morning trade.
Origin shareholders won't get a vote but they won't care too much with ConocoPhillips promising to pay $US5 billion up front for a 50% stake in Origin's coal-seam methane gase reserves and a planned 4-train LNG plant in Gladstone.
The maximum investment will be $9.6 billion, making it the largest direct investment in the assets of an Australian listed company.
Origin chairman Kevin McCann is the lead independent director of Macquarie Group and has been on the board since it floated 12 years ago in 1996. This is all very cosy but no-one will be complaining giving the superb outcome that has flowed after Origin walked away from BG Group's $15.50-a-share hostile bid, which has so far received acceptances representing just 0.14%.
Giles Parkinson had a good summary of the action on Business Spectator today, including this detail on the advisory team:
The Macquarie team managing the process for Origin was led by Rowan Ross and Robin Bishop, along with Paul Connolly and Stephen Brent. Clayton Utz did the legals with a team led by Rod Halstead and Jonathan Algar.
Bishop was the Macquarie adviser to Wesfarmers who chewed through some of the $600 million in transaction expenses on the Coles takeover and Rowan Ross must be extremely busy given that he is also a director of IAG, which has been fending off a Macquarie-advised QBE Insurance.
Halstead was on the Boral board at the time his firm Clayton Utz was a major adviser to the company, along with Macquarie. Indeed, Halstead was one of the Boral directors who decided to poach Tony Berg from Macquarie to be managing director and Berg's best move was the Origin demerger, which again generated plenty of fees for Macquarie and Clayton Utz.
Boral is today worth $3.66 billion and its former gas subsidiary stands alone with a market cap of more than $15 billion, so maybe we should think more highly of Berg in hindsight.
Foreign ownership and WA royalties
Foreign ownership of Australia's resources is about to become an even hotter issue after the ConocoPhillips deal, so we've updated our unique list tracking offshore control of our major resource projects. Indeed, we've also just updated our list tracking Chinese government investment in Australia.
After their experience with Mt Gibson and Rio Tinto, the Chinese seem to have concluded it is far less troublesome buying up exploration tenements.
Indeed, the $1.5 billion provisionally to be paid for Linc Energy's Bowen Basin tenements in Queensland was a stunning price and the cash-strapped NSW Labor Government has just pocketed $300 million upfront from the Chinese Government to have exclusive exploration rights over 190sq km of land near Gunnedah.
Finally, we should clarify yesterday's edition on the question of iron-ore royalties in WA. The 3.75% only applies to lower quality "fines" and it rises to as much as 7.5% for the premium quality "lump" ore.
Sydney speech on Wednesday morning - come along
If you're in Sydney and fancy coming along to a lively presentation at The American Club over breakfast on Wednesday morning, click here.
After that, it will straight down to the Seven Network EGM at 10am in Pyrmont to approve the latest Kerry Stokes buyback.
Alex the stage show comes to Melbourne
And why not come along on Wednesday night in Melbourne to see the stage show for The AFR's iconic cartoon Alex. Click here for a special discounted price of $75 per ticket.
Bradken SPP win
Amid all the doom and gloom on the market we finally had a solid win with the Bradken share purchase plan today. We bought 621 shares at $8.05 and sold them straight away this morning at $11.04, crystallising a net gain of just over $1800, which will keep the wolves from the door for a few days. Go here for the full list of our SPP plays since 2007.
BHP tilt discussion on Sky's Business View program
Go here for the video of presenter Helen Dalley's asking the tough questions over the forthcoming BHP-Billiton tilt in a recent edition of Sky Business Channel's Business View program.
Inside the Aristocrat fiasco
Michael Bachelard had a cracking feature in The Sunday Age yesterday revealing the governance and operational fiasco that was Aristocrat Leisure's push into the dodgy South American pokies market. This presumably came from the plaintiff lawyers after that recent $145 million class action settlement, but the detail unearthed in the discovery process made for a fabulous read.
Tomororw's ABC radio spots
We'll be back in touch after the Seven EGM on Wednesday, but do tune in to the regular spot with Deborah Cameron on 702 ABC Sydney tomorrow morning from 9.15am, as well as the 5.40pm spot with Lindy Burns on 774 ABC Melbourne.
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.
Kevin McCann's Macquarie fee bonanza
Macquarie Group shares have soared 11% today and this is not only because of the bailout of Freddie and Fannie and subsequent 3% surge in the All Ords.
Origin Energy's huge deal with ConocoPhillips must be a big factor because the Millionaire Factory will pocket a very fat fee of potentially more than $100 million for its advice that sent the Origin share price surging $1.95 to a record $17.60 in morning trade.
Origin shareholders won't get a vote but they won't care too much with ConocoPhillips promising to pay $US5 billion up front for a 50% stake in Origin's coal-seam methane gase reserves and a planned 4-train LNG plant in Gladstone.
The maximum investment will be $9.6 billion, making it the largest direct investment in the assets of an Australian listed company.
Origin chairman Kevin McCann is the lead independent director of Macquarie Group and has been on the board since it floated 12 years ago in 1996. This is all very cosy but no-one will be complaining giving the superb outcome that has flowed after Origin walked away from BG Group's $15.50-a-share hostile bid, which has so far received acceptances representing just 0.14%.
Giles Parkinson had a good summary of the action on Business Spectator today, including this detail on the advisory team:
The Macquarie team managing the process for Origin was led by Rowan Ross and Robin Bishop, along with Paul Connolly and Stephen Brent. Clayton Utz did the legals with a team led by Rod Halstead and Jonathan Algar.
Bishop was the Macquarie adviser to Wesfarmers who chewed through some of the $600 million in transaction expenses on the Coles takeover and Rowan Ross must be extremely busy given that he is also a director of IAG, which has been fending off a Macquarie-advised QBE Insurance.
Halstead was on the Boral board at the time his firm Clayton Utz was a major adviser to the company, along with Macquarie. Indeed, Halstead was one of the Boral directors who decided to poach Tony Berg from Macquarie to be managing director and Berg's best move was the Origin demerger, which again generated plenty of fees for Macquarie and Clayton Utz.
Boral is today worth $3.66 billion and its former gas subsidiary stands alone with a market cap of more than $15 billion, so maybe we should think more highly of Berg in hindsight.
Foreign ownership and WA royalties
Foreign ownership of Australia's resources is about to become an even hotter issue after the ConocoPhillips deal, so we've updated our unique list tracking offshore control of our major resource projects. Indeed, we've also just updated our list tracking Chinese government investment in Australia.
After their experience with Mt Gibson and Rio Tinto, the Chinese seem to have concluded it is far less troublesome buying up exploration tenements.
Indeed, the $1.5 billion provisionally to be paid for Linc Energy's Bowen Basin tenements in Queensland was a stunning price and the cash-strapped NSW Labor Government has just pocketed $300 million upfront from the Chinese Government to have exclusive exploration rights over 190sq km of land near Gunnedah.
Finally, we should clarify yesterday's edition on the question of iron-ore royalties in WA. The 3.75% only applies to lower quality "fines" and it rises to as much as 7.5% for the premium quality "lump" ore.
Sydney speech on Wednesday morning - come along
If you're in Sydney and fancy coming along to a lively presentation at The American Club over breakfast on Wednesday morning, click here.
After that, it will straight down to the Seven Network EGM at 10am in Pyrmont to approve the latest Kerry Stokes buyback.
Alex the stage show comes to Melbourne
And why not come along on Wednesday night in Melbourne to see the stage show for The AFR's iconic cartoon Alex. Click here for a special discounted price of $75 per ticket.
Bradken SPP win
Amid all the doom and gloom on the market we finally had a solid win with the Bradken share purchase plan today. We bought 621 shares at $8.05 and sold them straight away this morning at $11.04, crystallising a net gain of just over $1800, which will keep the wolves from the door for a few days. Go here for the full list of our SPP plays since 2007.
BHP tilt discussion on Sky's Business View program
Go here for the video of presenter Helen Dalley's asking the tough questions over the forthcoming BHP-Billiton tilt in a recent edition of Sky Business Channel's Business View program.
Inside the Aristocrat fiasco
Michael Bachelard had a cracking feature in The Sunday Age yesterday revealing the governance and operational fiasco that was Aristocrat Leisure's push into the dodgy South American pokies market. This presumably came from the plaintiff lawyers after that recent $145 million class action settlement, but the detail unearthed in the discovery process made for a fabulous read.
Tomororw's ABC radio spots
We'll be back in touch after the Seven EGM on Wednesday, but do tune in to the regular spot with Deborah Cameron on 702 ABC Sydney tomorrow morning from 9.15am, as well as the 5.40pm spot with Lindy Burns on 774 ABC Melbourne.
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.