Home Finance ASX snaps losing streak, Crown soars on takeover offer

ASX snaps losing streak, Crown soars on takeover offer

191
0

Today, most sectors rose on the Australian Stock Exchange, with Crown’s shares soaring past the casino giant’s surprise takeover offer price. The Australian share market snapped a three-day losing streak on Monday, with most sectors gaining ground. At the same time, beleaguered casino giant Crown Resorts was the standout performer after a surprise $8bn takeover bid.

The S&P/ASX200 closed 0.66 percent higher at 6752.5 while the All Ordinaries Index rose 0.51 percent to 6995. OpenMarkets Group chief executive Ivan Tchourilov said the local bourse marched to its own beat after US markets closed mixed on Friday.

Crown received an unsolicited, non-binding and indicative proposal from New York-based private equity giant The Blackstone Group of $11.85 cash per share, sending its shares soaring by 21.4 per cent to $11.97.

The offer is subject to conditions, including regulatory confirmation that a Blackstone-owned Crown issuitable for owning and operatinge the Sydney, Melbourne and Perth casinos.

The board has not yet recommended shareholders — the most prominent being reclusive billionaire James Packer — and is assessing the proposal. Blackstone already has a 9.99 per cent stake in Crown.

ASX

It comes just two days before the company faces a royal commission in Victoria over its explosive money laundering scandal. Another primary mover was department store chain Myer, which gained 5.97 per cent to 35.5 cents.

“The stock looks interesting at current levels with a lot of buying pressure coming through today,” Mr Tchourilov said. “Their retail outlets obviously struggled during COVID, but online sales have done quite well, which has kept them going. “Meanwhile, Myer’s short-term liabilities – due within 12 months – are around $650m, and it only has $300m or so in cash and short-term receivables, due within the same time frame.

“They clearly still have balance sheet worries, which makes it quite difficult to put together a strong investment case for them.” Online retailer Kogan was a laggard, shedding 3.46 percent to $13.67. The materials sector was weaker after iron ore prices fell. Rio Tinto lost 1.15 per cent to $107.81, BHP retreated 0.89 per cent to $44.50 and Fortescue slumped 4.25 per cent to $19.16.

CommSec analyst James Tao said there were continuing concerns about Chinese demand for Australia’s key export. “There’s a number of steel mills that will be shutting down production or easing production for environmental reasons,” Mr Tao said. Most insurers fell by between 2 and 3 percent due to the foul weather in NSW and southeast Queensland.

IAG said it had received more than 2100 claims as of Sunday night, and it was too early to accurately determine the net cost of the flooding and storms. IAG shares dropped 2.26 per cent to $4.75. Suncorp said it had received about 1300 claims by Monday morning. Shares in Suncorp eased 2.07 per cent to $9.92.

Telstra improved 1.25 percent to $3.25 after updating its plan to split the business into four entities, primarily to better realize the value of its infrastructure assets. The telco says investors will hold shares in the new holding company on a like-for-like basis with no change to their ownership levels, and a recommendation from an independent expert is expected to be released in early September.

If the plan goes ahead, completion is anticipated by December, Telstra says. ANZ appreciated 0.5 percent to $28.37, Commonwealth Bank added 0.44 percent to $85.08, National Australia Bank lifted 0.73 percent to $26.12, and Westpac put on 0.57 per cent to $24.66.

Both CBA and ANZ announced they had reached an agreement to settle a class action commenced in the US in 2016 in relation to the bank bill swap rate and the trading of BBSW-based products. They said the settlement was without admission of liability, the terms were confidential and the financial impact was “not material”. The Aussie dollar fetched 77.33 US cents, 55.76 British pence, and 64.95 Euro cents in afternoon trade.

LEAVE A REPLY

Please enter your comment!
Please enter your name here