Thursday, October 11, 2007

Murchison launches $1b bid for Midwest

Australian market news that matters, in 90 seconds or less

Murchison launches $1b bid for Midwest
11 October 2007 - Melbourne Australia

After failing to convince Midwest that a friendly merger was the way to go, Murchison Metals has made a bid for the company valued at approximately AU$1 billion. The move has been seen by some as an attempt by Japanese interests to head off the Chinese in the race to open up WA's lucrative Mid West. The most recent interest rate rise, coupled with low housing affordability, caused a drop in first-home buyer loans and investor led construction in August. Telstra has met the federal government's deadline and agreed to switch on 211 ADSL broadband exchanges, meaning that all Australians will now be able to access broadband internet. Westpac boss David Morgan has expressed confidence that the bank's proposed acquisition of RAMS will go ahead. Meanwhile, the All Ordinaries and ASX 200 were setting new highs again yesterday, prompting some analysts to predict the market will pass 7000 before Christmas.

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Japan v China for WA iron ore
In what is being seen as a battle between Japanese and Chinese interests for access to West Australian iron ore, Murchison Metals (ASX:MMX) yesterday launched an AU$1 billion bid for Midwest Corporation (ASX:MIS). Murchison, backed by Japanese company Mitsubishi (TYO:8058), made the bid after failing to convince Midwest – backed by Sinosteel – that a friendly merger was the way forward. The companies have different plans on how to open up WA's lucrative Mid West region.

Home loans plummet as housing moves out of reach
First-home buyer loans and finance for investor-led construction dropped substantially in August, as a hike in interest rates and a lack of affordable housing took their toll. Nationally, housing affordability may be at its lowest since interest rates hit 16-17% in 1989-90.

Coonan makes another U-turn
Telstra has agreed to switch on 211 ADSL broadband exchanges around Australia, meeting Communications Minister Helen Coonan's deadline for signing off on approximately AU$40 million in funding for the project. The company's solicitor also wrote an open letter questioning Ms Coonan yesterday, after she said that the federal Government would consider using taxpayer monies to fund a fibre-optic network to Australian homes.

Westpac bid as good as it gets for RAMS
Westpac (ASX:WBC) chief David Morgan has said that he is confident the bank's bid for distressed lender RAMS (ASX:RHG) will be successful, as a rival bid is unlikely to emerge. Mr Morgan also said that the trouble surrounding RAMS is an isolated case.

All Ords on track to crack 7000 before Christmas
The All Ordinaries set a new intraday high of 6667.6 yesterday, with BHP Billiton (ASX:BHP) and Rio Tinto (ASX:RIO) playing a significant part in the index's climb. Analysts say that the market could reach the symbolically significant 7000 mark before Christmas.

All the best,

Chloe Wilson