Big Deals

Growing interest in the third tranche of Telstra shares prompted us to take a closer look at the dealings of Sol Trujillo’s predecessor as chief executive of Telstra, Ziggy Switkowski. Along with seats on the board of Suncorp-Metway and Tabcorp, since the start of this year Switkowski has been a director of Healthscope (HSP).
On October 24 and 25, Switkowski bought 100,000 shares in the hospital operator for $498,000 in an on-market transaction, taking his direct holding in the company to 130,000 shares. In a separate transaction, Healthscope’s deputy chairman, Linda Nicholls, indirectly bought 10,000 shares in the company for $49,500 on October 30. (Nicholls is also chairman of Australia Post.) Healthscope has appreciated strongly since delivering good results on August 25, adding about 20%.

The chief executive of ANZ Banking Group, John McFarlane, made a series of direct and indirect trades on October 30 that will be of interest to investors. As part of the ANZ directors’ share plan, McFarlane received 101,571 shares. On the same day, he disposed of exactly the same amount of shares from his personal holdings, netting him $2.9 million. In addition to this, he indirectly bought 2515 shares valued at $73,000 through his superannuation fund, Ballimore Pty Ltd.

The managing director of Brickworks (BRW), Lindsay Partridge, has bought a substantial parcel of shares at a time when undervalued materials companies are being re-examined. On October 30, the first day of trading after the $16 billion bid for Rinker was announced, Partridge indirectly bought 23,453 shares in Brickworks for about $290,000.

As interested as we are in directors buying company stock, we take just as much notice of directors who sell stock, for obvious reasons. On October 27, a director of Melbourne IT (MLB), Tom Kiing, offloaded 400,000 shares in the supplier of domain names for more than $1 million. Kiing retains about 5.4 million shares in the company. A media release from Melbourne IT’s company secretary said the trade was part of an attempt to rebalance Kiing’s portfolio.

With tax breaks associated with agricultural vehicles under review, many investors are hesitant to stay with stocks that reap those particular rewards. The Commonwealth Bank, however, is betting that many of those breaks will remain. The bank has been steadily acquiring stock in Great Southern Plantations (GTP). Already holding 13.3% of the company, Commonwealth Bank of Australia Funds reported to the ASX that between August 31 and September 26 it had bought 4.1 million shares for about $10.4 million, increasing its overall stake in the company to 14.6%.

In a series of trades reported to the ASX on October 31 and November 1, a UK fund manager with a taste for natural resources has made a series of acquisitions on the ASX worth more than $124 million. On October 3, Baker Steel took the plunge and bought $34.5 million worth of shares in Ballarat Goldfields (BGF) at about 20¢ each. Since then Lihir Gold appeared on the scene with a takeover offer and Ballarat Goldfields has appreciated by 25%.

Separately, on November 1, Baker Steel reported that it had been acquiring shares over the course of the year in a number of different mining operations. These included investments of $5 million in Climax Mining (CMX), $16 million in Oceana Gold (OGD) and $68 million in Perseverance (PSV).

Boutique fund manager Ausbil Dexia has taken advantage of a strengthening ABC Learning (ABS) to increase its stake in the company. After retesting three-month highs on October 16, Ausbil Dexia bought 6.5 million shares in ABC Learning for about $41.7 million. It now holds about 28 million shares in the $2.6 billion company, taking its stake from 6.1% to 7.1%.

Separately, fund managers at AXA have taken advantage of the cyclical weakness in the share price of Macquarie Airports (MAP) to acquire about 20 million shares in the infrastructure fund. Between August 15 and October 26, AXA acquired the parcel of shares for about $79 million, taking its holding from 8.6% to 9.6%.

Covering off on activity in the media stocks, we are not surprised to see IOOF Holdings selling down large parcels of shares in companies with intense takeover speculation surrounding them in the days following Senator Helen Coonan’s new media ownership laws passing through parliament. Between October 20 and 30, IOOF sold three million shares, or $14 million worth of stock, in John Fairfax Holdings (FXJ), ceasing to be a substantial shareholder in the process.

IOOF has also been actively selling Ten Network (TEN) over a period of almost a year, reducing its holding from 9.6% to 8.2% of the company for $109 million. Separately, it has reduced its holding in the multi-faceted media company STW Communications (SGW). Selling 2.6 million shares for $7.6 million, it has reduced its overall holding in STW Communications from 10.1% to 9.5%.