Anz Chief Has Good Reason To Be Cross

Sydney Morning Herald

Friday October 17, 2008

Edited by COLIN KRUGER xchange@smh.com.au

Bank faces claims after the collapse of margin lenders.

ONE could forgive ANZ chief Mike Smith for feeling rather more "pissed off" when he delivers the bank's full-year results next week.

The liquidation of failed margin lender Opes Prime on Wednesday, followed by Primebroker Securities yesterday, opens the way for legal action against the bank, which acted as financier for both.

Primebroker is readying a $160 million damages claim. Both liquidators are also threatening to overturn the transactions that delivered ANZ most of the assets it secured to pay down its loans to the two margin lenders.

ANZ has said previously it doesn't expect any material impact on its earnings but that may change on Monday when the mediation over its exposure to Opes is expected to conclude.

Primebroker's liquidator, Laurie Fitzgerald, also noted yesterday that the Australian Securities and Investments Commission "has taken a keen interest in [Primebroker], its history and reasons why it has ended up in this predicament".

Former Primebroker directors have made no secret of the fact they blame ANZ for its collapse.

ANZ shares closed lower yesterday, down 4.8 per cent or 87c to $17.33.

Woolies stalled

Takeovers aren't always simple affairs but two years after buying a stake in The Warehouse - a Kiwi version of Big W - Woolworths still hasn't even got to the bidding stage in itson-again off-again affair.

Thankfully the end is in sight, with Woolies yesterday dropping its legal moves aimed at overturning the NZ regulator's ban on it bidding for The Warehouse.

The court action was a bit pointless anyway, since the landscape has altered drastically since it launched its challenge.

Woolies was arguing the toss over whether The Warehouse's move into food retailing made it a vital "third maverick player" in the supermarket industry - a strategy The Warehouse knocked on the head this month.

Woolies is still keen to get its hands on the $1.1 billion company because it has the spare cash and it is a lot cheaper to buy now than a year ago.

But it's playing its cards close to its chest and still hasn't committed to whether it will make a bid for fear of driving The Warehouse's share price up too much.

If it is keen, it will likely reapply for clearance to make a bid to the NZ Commerce Commission.

Shares in The Warehouse rose 5c to $3.20 yesterday, while Woolies fell 39c to $26.

Boost for retail

Citi retail analyst Craig Woolford reckons retailers like Pacific Brands, Woolworths and Wesfarmers - through Coles, Target and Kmart - will be boosted by the Government's $7.5 billion in handouts to be paid in December.

He says a quarter of it will be spent in retail, which should boost sales growth by 5 per cent in December and January.

We won't buy whitegoods or furniture, apparently preferring to spend on small electronic gadgets, laptops and computer games.

Comeback official

Perth mining identity Michael Kiernan is officially on the comeback trail after shareholders in Sydney investment vehicle Alexanders Securities yesterday approved his plan to shift its focus to mining and take a seat on the board.

Kiernan hopes to use Alexanders to buy the assets of one of his former companies, Monarch Gold, which is in administration.

It would be his third attempt at resurrecting the Davyhurst goldmine, after failed efforts with Monarch and Croesus Mining. This week, he also took a 7.2 per cent stake in copper hopeful Redback Mines. Meanwhile, some of his former companies, such as mineral sands miner Matilda Minerals, are struggling to stay afloat.

© 2008 Sydney Morning Herald

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