Big Deals

Investment director Peter Morgan was very bullish about building a long-term position in Insurance Australia Group (IAG) when he spoke to Eureka Report back in October 2005, but that was then. In past few days 452 Capital has offloaded $38 million of IAG and ceased to be a substantial shareholder in the process. At the same time 452 Capital appears to have gone cold on media stocks. Selling stakes in both the Ten Network Group (TEN) and STW Communications (STW). Whether this is part of a broader strategy or simply window dressing remains to be seen.
The Commonwealth Bank (CBA) produced some interesting tech plays last week that deserve the attention of investors. First, on June 9 the bank announced to the ASX that it was increasing its holding in the newly listed accommodation provider Wotif.com, from 5.11% to 7.88% at a cost of $13.6 million. In another move it spent about $6 million increasing its holding in Iress Market Technology (IRE) from 6.6% to 7.6%. Iress provides data for finance professionals and has doubled in value from $2.72 in April 2004 to $5.53 at the close of trade yesterday.

Separately, ANZ has been building a stake in the merger participant SFE Corporation (SFE), collecting about 500,000 shares for $8.5 million. This may prove a particularly astute purchase as SFE shareholders try to squeeze more value out of the merger terms that have been offered by the Australian Stock Exchange (ASX).

Perpetual (PPT) announced yesterday that its funds under management had shrunk by $800 million last month and you could certainly assume that the events of the past few days had wiped off another billion dollars since then. Last week the diversified financial group took advantage of Pacific Brands’ (PBG) falling share price by boosting its holding in the clothing manufacturer from 12.2% to 13.2% '” picking up 5.5 million shares for just under $12 million. Yesterday’s correction took Pacific Brands back to its nadir of $2.09 reached in May 2005.

Glancing across the activities of other financials we see that ING Australia Holdings is taking a punt on listed property trusts by acquiring $41 million worth of shares in the Investa Property Group. ING has increased its holding from 6.2% to 7.45% at an average price per share of $2.17.

Moreover, Challenger Financial Services (CGF) has made a significant investment in small-cap fibre optics player Pipe Networks (PWK). Putting down $5 million in exchange for 6.6% of the company, the team at Challenger is clearly anticipating a turnaround in Pipe Networks’ share price in the near future.

There has been some interesting activity surrounding Great Artesian Oil & Gas (GOG) over the past week. After announcing that it had made discoveries in the Cooper Basin area, its joint venture partner Beach Petroleum (BPT) began acquiring a stake in the company, stopping just short of the 20% holding that would trigger a compulsory takeover bid. Beach Petroleum paid 50¢ a share or $14.5 million for 19.97% of GOG.

The Boston based fund manager GMO is lightening its holding of Australian materials company CSR Limited (CSR). Last week the stock plunged below $3.50 after hitting a high of $4.46 on March 31. GMO announced it had SOLD 15.5 million shares for $61 million, reducing its holding from 7.03% to 5.32%. CSR has been on the march since 2000 when it was trading below $1 and GMO is no doubt locking in some serious profit.