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June 26, 2023
Good Morning,
Many buyout firms considered hedging against rising interest rates a waste of time and money, the Commerce Commission in New Zealand say it has now opened a market study into the competition in the retail banking sector, Ford Australia has confirmed plans to get rid of hundreds of jobs, and Jetstar continued its months-long run as Australia’s most unreliable airline in May with more cancellations and delays than any of its rivals.
Let’s jump in!
Before The Bell
Markets
Exporters will be keeping a close eye on China this week to see if the country’s central bank cuts longer term interest rates to stimulate the economy of New Zealand’s largest trading partner (Stuff)
Investor enthusiasm for the U.S. sharemarket, which helped push the S&P 500 into a bull market this month, looks misplaced given the risk of a recession, says Warren Pies of 3Fourteen Research (AFR)
Chinese exports of used cooking oil to Singapore jumped to a record last month, likely due to more demand from Neste Oyj’s renewable fuel refinery. (BBG)
The yen fell to a record low against the franc amid the growing monetary policy divergence between Japan and Switzerland, with the latter’s central bank expected to raise interest rates Thursday. (BBG)
The Bank of England increased rates to 5% from 4.5%, the highest level in 15 years. Most had expected a smaller rate rise. (BBC)
Earnings & Data
Advertised salaries increased by 4.7% in the year to May 2023, the fastest annual growth recorded by Seek NZ since its data collection began in 2016. However, with the country in a recession, job ad numbers declined 5% month-on-month and were 22% lower than May 2022, when job ads were at their highest on record (Stuff)
Cost of living's surprising bite on pie sales over the ditch (Stuff)
Big NZ banks making profits of $300-per-second (Stuff)
Auckland is now the most expensive region to rentin the country, after its median weekly asking price climbed to $660 in May, Trade Me Property says. The property website’s latest figures showed asking rents in the region had gone up 10%, or $60 a week, since May last year. At the same time, the supply of Auckland rentals advertised on the website was down 35% annually, while demand for them was up 55% (Stuff)
Fletcher Building lowered its annual profit forecast to around $800m (NZD), citing lower demand and weather conditions as reasons for the downgrade (Stuff)
Seeka announced it expects a net loss after tax of between $20m (NZD) and $25m (NZD) on the back of reduced kiwifruit volumes (NZX)
USX-listed tourism company Skyline Enterpriseshas more than doubled underlying profit as tourism has rebounded in New Zealand, despite high inflation and on-going labour shortages. (NBR)
Ocado Group shares surged by over 40% on Thursday after The Times newspaper reported speculation of possible bid interest in the online supermarket and technology group recently squeezed by a cost of living crisis in the UK. (RT)
News Summary
Monday
Eftpos provider Smartpay Holdings has disclosed the theft of information pertaining to a group of its customers in a ransomware cyber threat, but it is not yet sure of its extent of the theft or the content of the stolen data (NBR)
Indonesia and Elon Musk’s rocket company SpaceX on Monday launched the country’s largest telecommunication satellite from the United States, in a $540 million USD project intended to link up remote corners of the archipelago to the internet (RT)
Nearly 100 people in eastern India have died since late last week as a result of higher-than-normal temperatures, the Associated Press reported (BBG)
Tuesday
Many buyout firms considered hedging against rising interest rates a waste of time and money. Their debt-laden companies are now paying the price (BBG)
KKR & Co. has overhauled its Asia-Pacific private equity team in the early stages of allocating capital from its $15 billion regional fund as deal making sputters on strained US-China relations (BBG)
Kidder Williams, the high-profile Melbourne deal makers specialising in agribusiness and food, have been drafted in by the board of Bubs Australia as the company reworks its market strategy in a bid to save its share price (AFR)
Wednesday
Thursday
Campaigners urging the government to take a hard line on retail crime are saying parents should be held accountable for children too young to face prosecution. (RNZ)
It is positive that New Zealanders now see Asia as an important region for the country to engage with, but more action is needed from governments, businesses, educators and individuals to translate that interest into efforts to learn more about the region, academics say. (RNZ)
Jetstar continued its months-long run as Australia’s most unreliable airline in May with more cancellations and delays than any of its rivals, though the sector overall significantly improved its performance compared with 2022. (AFR)
Weekend
The heavily armed Russian mercenaries, who had made significant progress towards Moscow, abruptly ceased their advance (RT)
Tank cars plunge into Yellowstone River following a bridge collapse in Montana (RT)
According to ET, Go First creditors give the green light to interim funding of $52 million (BBG)
Deal Flow
Investments / M&A
Australia & New Zealand
The acquisition of an Auckland-based plumbing company helps pave the way toward one business owner’s grand growth ambitions while safeguarding what was built before him. (NBR)
A deal on Whakapapa ski field has been delayed rather than halted, says a director of would-be buyer Whakapapa Holdings after rescue plans for Ruapehu skifields failed to garner the required level of support at a creditors’ meeting on Tuesday. (NBR)
Dual-listed telematics business Eroad has received a full takeover bid from Canadian company Volaris Group at $1.30 per share in cash, representing a 69% premium to its closing share price yesterday and valuing the company at $146.8 million. (NBR)
Northern Star will spend $1.5 billion by the end of the decade to double the amount of gold it will produce at its massive Super Pit mine by Kalgoorlie. (AFR)
Key Global
Billionaire investor Warren Buffett’s Berkshire Hathaway said it added to stakes in Japan’s five biggest trading houses to beyond 8% on Monday, a move likely to highlight and add to the momentum driving Japan’s stock market to new heights (RT)
Florida-headquartered private equity investor I Squared Capital has emerged as a preferred bidder for Downer’s waste management business Repurpose It, winning over the contractor with a bid of around $250 million AUD (AFR)
KKR & Co. agreed to purchase as much as €40 billion ($44 billion) of buy-now-pay-later loan receivables from PayPal Holdings Inc. in a deal that frees up the payments giant to do more share repurchases (BBG)
GTC SA, a real estate company controlled by a foundation set up by the Hungarian central bank, is seeking to expand into Swiss and French luxury properties, in a surprise move away from its focus on eastern European offices (BBG)
Orange SA’s $19 billion bid to combine its Spanish operations with Masmovil Ibercom SA is under threat from European Union merger watchdogs unless the firms fix a list of competition concerns set to be issued by regulators (BBG)
Civitas Resources on Tuesday said it would acquire oil and gas operations in the Permian basin managed by private equity firm NGP Energy Capital Management for $4.7 billion, expanding its operations into the lucrative shale patch (RT)
Energy company NiSource said on Tuesday it would sell a minority stake in its unit, NIPSCO, for $2.15 billion to asset manager Blackstone'sinfrastructure unit (RT)
Global Auto Holdings will buy British car dealership chain Lookers for about 465.4 million pounds ($595 million) in cash, the companies said on Tuesday (RT)
Civitas Resources Inc is nearing a deal to acquire oil and gas operations in the Permian basin from private equity firm NGP Energy Capital Management LLC for close to $5 billion, including debt, people familiar with the matter said on Monday (RT)
Italian energy group Eni is closing in on a deal to acquire Neptune Energy Group, an oil and gas explorer, for ~$5B (USD) (BBG)
Civitas Resources have acquired assets controlled by PE firm NGP Energy Capital Management for ~$4.7B (USD) (BBG)
CVC is weighing the sale of its stake in the Philippine logistics company Fast Group. The sale could value the business at $1B (USD) (BBG)
De Grey Mining has acquired a 50% stake in a gold project being run by Novo Resources (AFR)
VC & Fundraising
Germany and Intel Corp. sealed an agreement for the US company to receive subsidies worth $10.9 billion USD for a semiconductor manufacturing facility in the eastern part of the country (BBG)
Hillfarrance Venture Capital’s new general partner Andrew Leahy says he is excited by the firm’s approach to investing, particularly the kind of community-mindedness that sees it share 20% of its carried interest or profits to its portfolio company founders. (NBR)
Equity Raises
Australia & New Zealand
Key Global
Luxury yacht maker Ferretti SpA’s main shareholder, China’s Weichai Group, is looking to raise about €268 million ($292 million) as part of a Milan stock offering as it pursues a dual listing (BBG)
Kodiak Gas Services said on Tuesday it is aiming for a valuation of about $1.65 billion in its U.S. listing, expecting to benefit from returning investor appetite for new offerings (RT)
Debt, Restructuring & Bankruptcy
Capital-hungry data centre business, AirTrunk, has mandated an army of investment banks to stitch together a whopping $4.76 billion sustainability-linked loan, expected to be the biggest corporate loan so far this year (AFR)
KKR agreed to buy up to €40B of PayPal’s Pay-Later Loan (BBG)
Jefferies has offered a $1.2B (AUD) debt package as part of the sale package for Ticketek owner TEG (AFR)
Ruapehu Alpine Lifts has officially gone into liquidation after a court hearing (Stuff)
Ernest Hillier, one of Australia’s oldest chocolate companies, has gone into voluntary administration (9 News)
Job Board
New Zealand
Australia
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