press digest-australian business news - april 8

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    PRESS DIGEST-Australian Business News - April 8
    07:18, Friday, 8 April 2005

    (Compiled for Reuters by Media Monitors)


    -- Telstra has bowed to pressure from fellow Foxtel
    shareholders, Publishing & Broadcasting Limited and News Corp.,
    to approve a deal with rival telecommunications provider, Optus,
    which is expected to arrest a blowout in losses hampering the
    growth of the pay television market. Under the agreement, Telstra
    will give Optus a greater share of pay television subscriber
    revenue in return for Optus agreeing to spend an estimated A$30
    million on converting its own pay television network to digital.
    Page 66.

    -- A breakaway group of beneficiaries to the A$2 billion
    gaming group, Tattersall's, has won its Supreme CourT appeal to
    distribute shares in the entity on an income model. The Court of
    Appeal yesterday handed down the ruling, which clears the way for
    Tattersall's corporate restructure and an eventual listing on the
    Australian Stock Exchange. Page 66.

    -- Virgin Blue yesterday announced it would nearly double its
    domestic fuel surcharge from A$10 to A$19 to partly offset the
    high cost of oil, which threatens to strip A$70 million from the
    budget airline's profit this year. Page 67.

    -- Centennial Coal is moving quickly to take over operations
    at Austral Coal now that it has secured a majority stake in the
    coking coal producer. Centennial received a rush of last-minute
    acceptances yesterday to take its stake in Austral to 66.7 per
    cent, despite commodity trader, Glencore International,
    announcing on Monday that it held 12 per cent of the stock and
    was considering its own takeover bid. Centennial chief financial
    officer, Robert Dougall, said his company's bid had now 'knocked
    Glencore out.' Page 67.

    -- United Group has won a A$262 million contract with New
    South Wales RailCorp to build 81 of its OSCAR passenger railcars
    to service Sydney's outer-suburban network. Page 68.


    -- Fortescue Mining Group's shareprice fell A59 cents to
    A$3.31 yesterday as further doubts emerged about an iron ore
    sales contract with a Chinese steel mill. Fortescue confirmed
    that Hebei Wenfeng Iron & Steel's A$10 million prepayment for
    iron ore would most likely be in the form of steel plate, not
    cash, something it failed to state when the prepayment deal was
    first announced on October 6 last year. Page 19.

    -- Transurban's hostile takeover bid for Hills Motorway
    received a boost yesterday following the release of new traffic
    figures showing Transurban was performing better than its
    takeover target. Average daily traffic volume on Transurban's
    CityLink toll road network in Melbourne was up 3.6 per cent in
    the first quarter compared to the same period in 2004, while
    traffic on the Hills M2 motorway grew by just 0.7 per cent. Page

    -- National Foods' shareprice hit a new high of A$6.50
    yesterday as investors bet on New Zealand-based Fonterra making a
    final counter offer to Philippine brewer San Miguel's A$6.40 per
    share takeover bid. Goldman Sachs JB Were analyst, Philip Kimber,
    said an increased bid by the dairy cooperative was a 'reasonable
    probability' as it had paid an average of just A$2.55 a share for
    its existing 19 per cent stake in National Foods. Page 19.

    -- Insurance Australia Group (IAG) is reportedly considering
    paying A$326 million for a 24.9 per cent stake in China Pacific
    Insurance Co's property unit. IAG is believed to have valued
    China Pacific's property insurance business at more than US$1
    billion. IAG chief executive, Michael Hawker, is understood to be
    keen to expand overseas because competition rules restrict the
    company's growth in Australia. Page 22.


    -- The Australian dollar rose more than half a cent to
    US76.88 cents yesterday following the release of
    better-than-expected employment figures. The Australian Bureau of
    Statistics' labour force data showed 57,800 people entered the
    workforce last month, with unemployment remaining at a 28-year
    low of 5.1 per cent in March. The strong figures prompted
    speculation about wage-fuelled inflation and an increased
    possibility of a rise in official interest rates next month. Page

    -- Idoport, which unsuccessfully sued National Australia Bank
    (NAB) for A$50 billion, is returning to court with a cashed-up
    United States (US) backer. The computer systems group had sued
    NAB and subsidiary, National Markets Group, for alleged breach of
    contract over the bank's failure to develop and market its
    electronic trading platform, AUSMAQ. The case was dismissed after
    Idoport failed to secure funds to continue the trial after costs
    swelled to nearly A$22 million. Idoport has now moved to revive
    its case with the financial support of Elliott Associates, a US
    hedge fund. Page 22.

    -- Aristocrat Leisure has rearranged its distribution to
    Russia, the world's fastest growing poker machine market,
    appointing a subsidiary of Moscow-based company, SmartGames Corp,
    as its exclusive distributor. Aristocrat said its new partner had
    agreed to form a dedicated subsidiary to distribute Aristocrat's
    game machines throughout Russia, where revenues from poker
    machines are predicted to more than double to A$9.7 billion. Page

    -- Jetstar chief executive, Alan Joyce, yesterday said the
    budget airline expected to introduce short-haul overseas flights
    on select routes within two years. Mr Joyce said the year-old
    airline, a subsidiary of Qantas Airways, had prospered because it
    avoided the cannibalisation problem that had afflicted other
    full-price carriers who tried to run budget carriers. 'There are
    predominant Jetstar markets and predominant Qantas markets,' Mr
    Joyce said. Page 23.

    -- Seacorp Group Australia is hoping to raise up to A$8
    million and float on the stock exchange. The fish wholesaler and
    processor has 30 million shares on issue and is seeking to raise
    between A$5 million and A$8 million through the issue of shares
    at A25 cents each. Page 23.

    THE AGE (

    -- Supreme Court Justice, Richard White, yesterday ruled
    mortgage group, Aussie Home Loans, had imposed an unreasonable
    restraint on an employee by having him make a blanket agreement
    not to poach staff for 12 months after leaving. The decision has
    been seen as a potential landmark in the framing of employment
    contracts, which have until now tended to include blanket bans on
    poaching staff. Page 12.

    -- Regenera will begin receiving royalty income from next
    year after signing a licensing agreement worth up to A$183
    million with a leading United States ophthalmology company.
    Regenera said it had licensed its cortico-steroid drug for use in
    eye surgery to Alcon Manufacturing, with the deal giving Alcon an
    exclusive global licence to manufacture and distribute the drug,
    which gives surgeons increased visibility during vitrectomy
    surgery. Page 14.

    -- Melbourne medical photonics company, Optiscan, has
    announced the development of a unique laser-based system for the
    early detection of cancer that could give it a sizeable portion
    of the A$900 million global flexible endoscope market. Page 14.

    Looking for more information from local sources?
    has 112 Australian sources including the Australian Financial

    ((Reuters Sydney Newsroom, 61-2 9373 1800,
    [email protected]))

    (c) Reuters Limited 2005
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