Takeover tussles weigh: Aus shares 0.1% lower at noon

Market Reports

by Jessica Amir

The Australian share market is trading underwater today with just a basket of sectors dragging down the local bourse, with Santos losing the most after it rejected its takeover offer. But we also had negative leads from the get-go after Wall Street closed lower on Trump not being satisfied with China trade talks.

Nevertheless the ASX200 is still trading in the range of its one-month high with property stocks making strong gains today with the likes of Vicinity Centres (ASX:VCX) up 2.3 per cent and Charter Hall (ASX:CHC) up 2.4 per cent.

The mining heavy weights, BHP (ASX:BHP) and Rio (ASX:RIO) are making modest gains despite the iron ore price falling 1.4 per cent to US$64.41 and its futures pointing to fall of 1.5 per cent.

The S&P/ASX 200 index is 7 points or 0.1 per cent lower at 6,035. On the futures market the SPI is 12 points lower.

Company news

Varian Medical Systems (NYSE:VAR) headquartered in the US, is out of the equation for potentially taking over Aussie listed Sirtex Medical (ASX:SRX). It comes as it advised the NYSE it will not be making a counter proposal to snap up the takeover target, following CDH’s conditional takeover offer of $1.87 billion (for $33.60 cash per share, minus dividends of up to $0.30 per share). Varian’s offer stands at $1.56 billion (for $28 per share). Sirtex also previously advised its underlying earnings (EBITDA) will be in the lower end of its range of $75 to $85 million. Sirtex entered a halt yesterday but today its trading at 4 per cent lower at $28.63

Oil and gas major, Santos (ASX:STO) rejected the $14.4 billion takeover proposal from US equity firm Harbour Energy, with the board saying the offer of US$5.21 per share doesn’t represent the full value of the company and is not in the best interests of shareholders. Which is why its shares are being sold off today. Meantime, a project operated by Santos (ASX:STO), owned by Melbana Energy (ASX:MAY), received the environmental go-ahead to undertake a seismic survey at the Beehive prospect, which is one of Australia’s largest under drilled hydrocarbon structures. It will be funded by Santos and French major, Total. After completion in August, Total and or Santos have an option to together or individually buy a 80 per cent interest in return for fully funding all activities and Melbana will retain 20 per cent. If we look at Santos (ASX:STO) shares at noon, they are trading 9 per cent lower at $5.86. While shares in Melbana Energy (ASX:MAY) trades 30 per cent higher at 1.3 cents.

The best and worst performers

The best performing sector is reits adding 1.1 per cent while the worst performing sector is energy, shedding 2.6 per cent.

The best performing stock in the S&P/ASX 200 is Charter Hall Group (ASX:CHC), rising 2.4 per cent to $6.25, followed by shares in Nib Holdings Limited (ASX:NHF) and Monadelphous Group Limited (ASX:MND).

The worst performing stock in the S&P/ASX 200 is Santos Limited (ASX:STO), dropping 9 per cent lower at $5.86, followed by shares in Sirtex Medical Limited (ASX:SRX) and Beach Energy Limited (ASX:BPT).

Asian markets

Japan’s Nikkei has lost 1.2 per cent, Hong Kong’s Hang Seng has lost 0.8 per cent and the Shanghai Composite has lost 0.6 per cent.

Commodities and the dollar

Gold is trading at $US1,293 an ounce.
One Australian dollar is buying 75.58 US cents.

Cryptocurrencies

Bitcoin trades US$7,935, Ethereum is 8 per cent lower to US$635 and EOS trades 8 per cent lower to US$12.17