The Australian share market has closed nearly one per cent down as first, worries over iron ore demand in China and then general weakness in metal prices sent the materials sector sharply lower.
The S&P/ASX 200 index closed 51 points down to finish at 5,412.
The value of trades was $4.5 billion on volume of 764 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited
(ASX:BHP), Rio Tinto Limited
(ASX:RIO) and Fortescue Metals Group Limited
(ASX:FMG).
On the futures market the SPI is 58 points down.
Company news
ASIC has announced it will look at a steep rise in Leighton Holdings Limited
(ASX:LEI) shares late last week, ahead of an offer by Hochtief announced today. Hochteif this morning launched a $1.15 billion conditional cash takeover bid for the company.
The German construction company has a 58.8 per cent controlling stake and has offered Leighton shareholders $22.15 per share in a bid to boost its stake and board representation.
The conditional, proportional off-market offer is to acquire 3 out of every 8 shares held by other Leighton shareholders. If all shareholders accept the offer Hochtief will lift its interest in Leighton to 74.23 per cent, pending the green light from Australia’s Foreign Investment Review Board.
Today’s announcement comes after Leighton told the ASX last Friday it was unaware of any reason which caused the company’s stock price to spike. Shares in Leighton Holdings closed 11.44 per cent up at $23.09.
Swala Energy Limited
(ASX:SWE) has announced it has inked a farm-out agreement with “an international integrated oil and gas company” for a 25 per cent working interest its Block12B permit in Kenya. The agreement will fund all past costs of the project and ongoing drilling costs.
Swala didn’t identify the partner, which has requested confidentiality. The deal is still subject to approval by the Kenyan government. Shares in Swala Energy closed 7.41 per cent up at $0.29.
Seven West Media Limited
(ASX:SWM) Chairman Kerry Stokes has stood apart from other broadcast media owners by saying he does not support changes to media ownership laws proposed by the Federal government. Stokes’ Seven West owns the nation’s number one television company, Pacific Magazines and The West Australian newspapers.
Stokes said that the government should be very careful changing existing media ownership laws while Communications minister Malcolm Turnbull says the existing laws are outdated in a digital landscape.
Analysts have said the move may be a defensive against possible mergers between Nine and Fairfax and News Corp and TEN. Shares in Seven West Media are trading up 1.4 per cent.
WestSide Corporation Limited
(ASX:WCL) is again a takeover target. The coal seam gas explorer is set to receive a $160 million takeover offer from a Chinese port, refinery and resources owner named Landbridge.
Landbridge today revealed its intention to make an off-market bid at 36 cents cash per share after it was not allowed to engage in talks with its takeover target last month and believes the offer represents good value for Westside’s shareholders.
The offer compares to a tentative 52 cent per share bid offered by PetroChina at the end of 2012 and withdrawn about six months later. Shares in WestSide are trading up 13.5 per cent.
Insurance Australia Group Limited
(ASX:IAG) has announced it will try to raise up to $200 million in subordinated debt to partially fund its planned acquisition of Wesfarmers insurance underwriting business, announced late last year. The entire acquisition is set to cost IAG $1.845 billion and will be funded by a combination of the subordinated debt, a share-purchase plan and an institutional placement.
If successful, the acquisition would make IAG, who already own NRMA and CGU, the biggest insurer in Australasia. Shares in IAG are trading down 0.55 per cent.
The best and worst performers
The best performing sector was Health Care adding 115 points to close at 14,938.The worst performing sector was Materials, losing 420 points to close at 10,020 points.
The best performing stock in the S&PASX 200 was Leighton Holdings Limited
(ASX:LEI), rising 11.44 per cent to close at $23.09. Shares in Pacific Brands Limited
(ASX:PBG) and Regis Resources Limited
(ASX:RRL) also closed higher.
The worst performing stock was Silver Lake Resources Limited
(ASX:SLR), dropping 11.54 per cent to close at $0.46. Shares in Arrium Limited
(ASX:ARI) and Atlas Iron Limited
(ASX:AGO) also closed lower.
Commodities
Gold is trading at $US1,334 an ounce. Light crude is $1.02 up at $US102.58 a barrel.
The Australian dollar is buying $US0.9037.
