February 28th, 2010 by admin
From correspondents in London - AFP
BRITISH insurer Prudential is in talks to buy AIA, the Asian arm of US giant AIG, for $US25 billion ($A28.14 billion).
Prudential is in talks about a takeover that would be one of the biggest-ever foreign acquisitions made by a British company”, Sky News channel said.
The insurer has been examining a range of options for the deal which could cost it about $US25 billion ($A28.14 billion), the report said.
It said the Prudential’s preferred option is a share placing worth about $US23 billion ($A25.89 billion), which would make it one of the biggest fundraisings ever by a British company.
Talks have already begun with existing Prudential shareholders, the report added.
A Prudential spokesman declined to comment when contacted by AFP.
US insurance giant AIG reported on Friday a fourth quarter net loss of $US8.9 billion ($A10.02 billion), better than the worst of market fears, as it strove to repay a multi-billion dollar taxpayer bailout.
AIG said the loss stemmed mainly from charges tied to paying down its debt from the bailout, that eventually ran into a staggering $US180 billion ($A202.61 billion), and boosting commercial insurance reserves.
December 2nd, 2009 by admin
THE competition watchdog has knocked back Caltex Australia’s attempted takeover of 302 Mobil service stations because it would probably lead to higher retail fuel prices.
Shares in Caltex slumped 22 cents, or 2.29 per cent, to $9.38 by 2.31 (AEDT). The stock closed at a seven-month low $9.16 on November 27.
The Australian Competition and Consumer Commission (ACCC) said it intends to oppose the proposed acquisition of Mobil Oil Australia’s retail assets.
“The ACCC concluded that the acquisition by Caltex of Mobil’s 300 service stations would be likely to substantially lessen competition across a range of retail fuel markets,” chairman Graeme Samuel said.
The ACCC identified 53 Mobil sites which it said would lead to substantial competition reduction if bought by Caltex.
“The acquisition of these sites by Caltex would be likely to lead to reduced retail competition resulting in higher fuel prices for consumers,” Mr Samuel said.
Caltex, Australia’s biggest oil refiner, in May offered to buy all of Mobil’s service stations for $300 million, taking its total to 598 stations and allowing it to better compete in the retail market.
That helped the shares to rise above $13 on several occasions, until they started to slide in September when the ACCC extended its review period into the takeover proposal.
Caltex, half owned by US energy giant Chevron, said in a statement that it was considering its options.
“Caltex will consider its position on the basis of today’s announcement, the public competition assessment and further discussion it proposes having with the ACCC,” Caltex chief executive Julian Segal said.
“Caltex will then determine what action it will take in response to the announcement.”
Whether it succeeded in buying some or all of Mobil’s service stations, Mr Segal said Caltex would focus on growing its existing business while pursuing takeover opportunities and achieve total shareholder return in the top quartile of ASX 100 companies.
The ACCC said that it Mobil was likely to exit its Australian retail business over the next two to three years and a significant proportion of the sites would be purchased by retailers with a greater propensity to discount.
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December 2nd, 2009 by admin
THE price of gold reached above $US1200 ($1297.68) an ounce for the first time overnight as a weak US currency pushed up demand for the precious metal viewed as a safe-haven investment, analysts said.
Gold struck a record high $US1201.63 an ounce on the London Bullion Market overnight .
By 12,03pm AEDT, the spot price of gold in Sydney was $US1202.50 per fine ounce, up $US23.08 on yesterday’s closing price of $US1179.42.
RBS Morgans private client adviser Trent Muller said gold-leveraged stocks probably were performing best after the gold price reached an all-time high.
“There’s a perception that people are still going to flock to gold or gold stocks because of fears of inflation, as opposed to putting themselves in the US dollar as a safe haven,” Mr Muller said.
Lihir was up 15 cents at $3.73, Newcrest had added $1.59 at $38.99, Newmont lifted 19 cents to $6.02, and Centamin Egypt was 11 cents higher, by 4.7 per cent, at $2.45.
Gold up as US dollar drops
Gold has struck historic peaks over recent days and weeks as the US dollar drops against major rivals the euro and yen.
“As ever, another painful week for the US currency saw new highs for gold,” VTB Capital commodities analyst Andrey Kryuchenkov said overnight.
In recent weeks, gold has smashed record after record also on the back of inflationary fears and increasing moves by central banks to diversify assets away from the greenback.
The yellow metal, whose two main drivers are jewellery and investment buyers, has also won favour in the uncertain economic climate and fears of a mounting Dubai debt crisis.
“Gold continues to benefit from an almost ‘perfect storm’ of weak currencies, minimal interest rates, fears about future inflation and fears about financial stability,” said Capital Spreads analyst Simon Denham.
“None of these worries looks like going away any time soon and so the march higher goes on.”
The weaker US currency makes gold cheaper for holders of rival currencies, stimulating demand for the metal and eventually lifting prices.
Sri Lanka’s bank also pushing gold prices up
Gold prices had also been driven higher after last week’s purchase of IMF gold by Sri Lanka’s central bank.
The International Monetary Fund (IMF) announced it had sold 10 tonnes of gold to Sri Lanka’s central bank for $US375 million as part of a restructuring of its financial resources.
The record run also came after last week’s newspaper report that India was mulling the purchase of more IMF gold reserves.
“The overall sentiment on gold remains bullish, also spurred by rumours last week that India was ready to buy more IMF gold, according to an article in India’s Financial Chronicle,” said analyst Kryuchenkov.
“The IMF declined to comment when asked by the media and we do believe it is just pure speculation at the moment.”
He added: “Sri Lanka bought 10 tonnes of the precious metal, also helping to stir up positive vibes yet again.
“Granted, it was not much, but this was nevertheless supportive with increasing rhetoric over central bank diversifications and US inflation expectations still running high as we go into 2010.”
Canadian mining giant Barrick Gold meanwhile on Tuesday announced it had eliminated all of its hedges on the world’s largest gold production and reserves, hoping to profit from rising gold prices.
The gold hedges were contracts whereby Barrick – the world’s number one gold producer – sold gold ounces it expected to produce in advance for a fixed price.
In the meantime, if the price of gold increased, Barrick was obligated to sell its gold at the lower price or buy it in the marketplace at a higher price to meet its contractual obligations.
Hedging is normally used to insulate companies from market price fluctuations and provide a level of financial stability for their operations.
Barrick announced in September it would pull the plug on its remaining gold hedges, as it was not benefiting from any increase in the gold price, which is forecast to continue rising over the long term as deposits are depleted.
“Our positive view on the gold price led us to accelerate the elimination of these contracts ahead of the schedule we had established,” said Aaron Regent, Barrick’s president and chief executive.
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From correspondents in London - AFP