The Border Watch : May 27th 2014
Business Board sacks CeO SAI Global offered $1.1 billion takeover bid, boss axed after four months at helm MELBOURNE: Information and standards company SAI Global has sacked its chief executive and revealed it is the subject of a $1.1 billion private equity takeover bid. Pacific Equity Partners has launched an indicative bid for the Sydney-based information services group, best known for its subsidiary, Standards Australia. News of the offer came as SAI revealed it had axed chief executive Stephen Porges, just four months after he took the helm. SAI also flagged job cuts, the closing of offices and other restructuring which would mean a $7 million hit to this year’s financial result. SAI shares soared 73c, or 17 per cent, to $5.01 – not far off its all-time high of $5.25 in April 2012. Pacific Equity is offering between $5.10 and $5.25 a share. That is a 19-23 per cent premium to last Friday’s closing price of $4.28. The offer was made on May 15, before action was taken against Mr Porges. SAI said it had not formed a view as to the merits of the proposal. Gold loses lustre PERTH: Gold production in Western Australia’s goldfields region has got off to a weak start for the year, with wet weather wreaking havoc at several mines. Output dropped 7 per cent to 68 tonnes between the March and December quarters as intense storm systems dumped rain on large areas of the state, Melbourne-based gold mining consultants Surbiton Associates said in a report. On an annual basis, the amount of gold produced was up 8 per cent. During the March quarter, the Regis Resources Duketon Gold Project, near Laverton, was badly affected as 4.7 million tonnes of water flooded the Garden Well open pit to a depth of 45m. Meanwhile, Norton Gold Fields’ Paddington operations near Kalgoorlie reported 278mm of rain during the quarter – more than double the region’s average annual rainfall. Surbiton Associates director Sandra Close said gold production was often affected by rain early in the year, as tropical cyclones sweep in from the Timor Sea. “Wet weather forced many mines to cut ore production and restrict ore haulage in the March quarter,” Dr Close said. “This meant they had to rely on lower-grade, stockpiled material part of the time to keep their treatment plants running near capacity.” “Wet weather forced many mines to cut ore production and restrict ore haulage” She said the grade of ore fell by around 6 per cent overall. Despite the fall in output, some new capacity helped boost production as the Tropicana project reached full capacity and the new Mungari treatment plant near Kalgoorlie was commissioned. “We were unlikely to resolve the differences between the non-executive directors and the CEO” However the board was open to holding talks with Pacific to explore whether a binding proposal could be put to shareholders. Invast chief market analyst Peter Esho noted growing interest in Australia’s industrials space in a sign that rival bids could emerge. “I think we’ll see more of this in what I call the lazy industrials – stocks that are good businesses but don’t really have market trust in terms of what they can deliver in the immediate term,” he said. As SAI’s board considers Pacific’s offer, it has launched a search for a new chief executive after discovering “fundamental differences of opinion” with Mr Porges. “Last week, it became clear to the board that we were unlikely to resolve the differences between the non-executive directors and the CEO regarding the changes required and the pace of those changes to deliver the business improvements that we are seeking over the short to medium term,” SAI said. Mr Porges’ predecessor Tony Scotton and former chairman Robert Wright quit last October in the wake of an earnings downgrade and statutory loss of $43 million in 2012-13. AAP in Brief Holden recalls cars over seatbelt fault MELBOURNE: Holden is recalling almost 42,000 cars over a potential fault affecting front seatbelts. The precautionary vehicle safety recall affects certain MY14 VF Commodore and WN Caprice vehicles, Holden said yesterday. The company said an issue has been identified with certain seatbelts and the recall will affect 41,933 vehicles in Australia. The car maker said it would contact all potentially affected customers directly. First PNG gas cargo leaves for Japan PERTH: The first cargo of liquefied natural gas from the $20 billion Papua Guinea LNG project has left for Japan. LNG production started in April on the large-scale project in which Australian companies Oil Search and Santos are partners alongside project operator Exxon Mobil. Gas producer Santos said production from the second train has also started, while Oil Search revealed the cargo had been sold on the spot market to Tokyo Electric Power Company. Former MP new chair of EMA PERTH: Former West Australian environment minister Cheryl Edwardes has been appointed chairman of prospective uranium miner Energy and Minerals Australia. EMA managing director Mike Young said Ms Edwardes, a former WA attorneygeneral and labour relations minister, would provide “counsel, direction and important contacts for the company”. AAP Washed out: Gold production is down after heavy rains interrupt work at Western Australia’s mines. Ten confirms job cuts Aussie dollar trading in narrow range SYDNEY: Network Ten has confirmed it is cutting 150 jobs, the union representing journalists says. The Media Entertainment and Arts Alliance said Ten has confirmed the numbers and any employees seeking voluntary redundancy have until June 4. Comment was last night being sought from Ten, which announced last week it was axing its Wake Up breakfast program and gutting its news programs. “MEAA condemns this latest round of redundancies that further erode the broadcast and editorial functions at TEN,” the MEAA said. Ten has shed about 40 per cent, or 250 of its broadcast staff and journalists, since 2012, the union said. “These cuts represent repeated failures in strategy by TEN’s board of directors and senior executives whose jobs appear safe,” it said. Signal failure: Network Ten has announced it is cutting more jobs. Picture: AAP Two cooking shows, a tabloid entertainment program and US soap The Bold and The Beautiful have replaced the cut programs on Ten. 10 - The Border Watch, Tuesday, May 27, 2014 AAP SYDNEY: The Australian dollar is almost level, trading in a narrow range with no data or economic events to drive price changes. At 5pm yesterday, the local unit was trading at US92.38c, a touch down from 92.41c on Friday. During the local session, the Australian dollar traded between US92.27c and 92.46c. FXCM market analyst David de Ferranti said the Australian dollar is consolidating after falling 1.4 per cent last week. “A relatively light domestic economic docket for the week ahead offers few catalysts that could spark the same magnitude of declines for the Australian dollar seen last week,” he said. “The US Memorial Day holiday is likely to keep trading volumes thin over the session ahead, which could leave the currency to tread water above US92c mark.” Mr de Ferranti said US economic data out later in the week may push the US dollar higher and weigh on the Aussie. “Strong consumer confidence and durable goods orders readings could help restore faith in the pace of the US economic recovery after a fragile first quarter growth reading,” he said. “This in turn may help stir the US dollar bulls and awaken the greenback from its recent slumber.” US and London financial markets were closed during the offshore session yesterday for the Memorial Day public holiday and the British bank holiday. AAP Picture: AAP UGL hoses down board speculation MELBOURNE: Engineering and property services group UGL has hosed down speculation that chairman Trevor Rowe may be replaced later this year. Fairfax Media reported Mr Rowe was to be replaced by director Kate Spargo. But UGL says while it regularly discusses its succession plans, no decisions have been made. Sundance sells wells for $116m MELBOURNE: Sundance Energy has sold its Denver oil and gas assets in the United States for $US116 million ($125.51 million). Sundance said it would use the funds to develop and acquire assets in the Eagle Ford and Mississippian/Woodford shale oil and gas regions.
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