BREAKFAST DEALS: Smith goes Swiss

ANZ casts its super-regional net wider with a Swiss wealth tie-up, while Origin and Arrow might have solved their LNG woes.

ANZ Bank boss Mike Smith has placed another piece of the super regional bank puzzle thanks to a deal with a Swiss behemoth to offer private banking products to wealth customers. In LNG news, Goldman Sachs analysts see a way for Origin Energy and Arrow Energy to solve both their problems in one go. Elsewhere, Gerry Harvey says he’s just a "passive investor” in Qantas without confirming whether he’s giving his money to someone who’s definitely not, although there’s good reason for that. Also, Brickworks says the door is open for reform if Mark Carnegie can get an idea through it and Woolworths has hit a road bump in western Sydney placed by the consumer watchdog.

ANZ Banking Group, Vontobel Group

ANZ Banking Group has formed an alliance with Swiss private bank Vontobel Group, which will deliver a broader range of products to the bank’s affluent Asia Pacific customers.

The Melbourne-based lender’s private banking chief executive Joyce Phillips said the memorandum of understanding compliments the strategy of chief executive Mike Smith to position ANZ as a super regional bank in the Asia Pacific.

"It provides a pathway to develop a distinctive relationship with Vontobel that will deliver a unique offering for our private bank clients in Australia, New Zealand and Asia,” says Phillips.

"The aim is to provide clients with access to world-class investment capabilities to support our transition to an investment-led client offering.” Vontobel is a private banking specialist that has about CHF140 billion ($141 billion) under management.

ANZ isn’t alone in this regard. All the big four, with the exception of Commonwealth Bank, have pointed to wealth management as a possible growth area. But this is a significant move by ANZ to align this growth area with its broader regional goals.

The MOU states that Vontobel will lend its expertise in local investments, discretionary portfolio management, structured products and tools, client advisory and client processes. In return, the Swiss bank will get access to ANZ’s clients and franchise footprint across the 30 countries in the Asia Pacific.

ANZ says it expects to finalise the deal in the first half of 2013.

The timing of the announcement is interesting, with ANZ due to release a wealth management strategy update today.

Arrow Energy, Royal Dutch Shell, PetroChina, Origin Energy, ConocoPhillips

Analysts at Goldman Sachs have reportedly suggested that the owners of Arrow Energy could buy a stake in the rival Australian Pacific LNG Project, settling problems for both projects.

Royal Dutch Shell, co-owner of Arrow with PetroChina, announced earlier this month that it was considering "combining its reserves” with one of the other major LNG projects around Gladstone.

Meanwhile, Origin Energy is trying to sell another 15 per cent stake in its ALPNG project, co-owned with US-giant ConocoPhillips and China’s Sinopec, to raise more money for construction.

The problem for Origin is that Sinopec already has its hand on the initial production take and a strategic buyer would have to coax some of that LNG away. There’s doesn’t appear to be enough room for Origin to sell the stake at a high price, unless there’s some synergy benefits.

Which brings us to Arrow. According to media reports, Goldman Sachs analysts believe that Shell and PetroChina could help Origin out in its funding balancing act in return for some collaboration on the projects.

The number of shapes such a deal could take are effectively limitless.

Qantas Airways, Gerry Harvey

Retail kingpin Gerry Harvey has refused to confirm whether he’s an investor in an activist consortium in Qantas Airways, characterising himself as a "passive investor”.

According to media reports, the Harvey Norman chairman made the comments after the company’s annual general meeting yesterday, where the billionaire described Australian retail conditions as the worst in half a century.

Much like the aviation sector, it seems.

"I have zero input into anything that the Qantas board and management is doing,” said Harvey, adding that he’s not a supporter or detractor of Qantas boss Alan Joyce. He simply likes the share price in relation to the asset backing.

Given that the other suspected members of this consortium – former Qantas boss Geoff Dixon, Leighton Holdings chief financial officer Peter Gregg, adman John Singleton and venture capitalist Mark Carnegie – have refused to be drawn on their involvement, it makes sense for Harvey to keep the precise nature of his Qantas stake, held with his wife Harvey Norman chief executive Katie Page, ambiguous.

But if he does turn out to be a member of this group, it might be a difficult sell in hindsight to claim that you can be a passive investor in Qantas when it’s through an activist fund.

Brickworks, Mark Carnegie

Venture capitalist Mark Carnegie appears to be having a look at Brickworks just in time, if the reaction of the company’s chief adversary for more than a year is any indication.

According to media reports, Brickworks independent director Robert Webster told shareholders that any proposal for the benefit of shareholders, including the break-up of the cross shareholding arrangement with Washington H Soul Pattinson (SoulPatts), would always be considered.

"The door is not shut and will remain open,” said Webster.

Webster explained how the directors of Brickworks were encouraged by an independent review of the company that concluded the cross-ownership between Brickworks and SoulPatts – where Brickworks owns 43 per cent of SoulPatts and SoulPatts owns 45 per cent of Brickworks – was in the best interest of shareholders.

This was in response to a question of Perpetual fund manager Matt Williams, who has been a thorn in the side of Brickworks and SoulPatts chairman Robert Millner.

While Williams was said to be disappointed by the results of the review, he was also encouraged by the fact that the board was looking at these issues to begin with.

Perpetual owns 12.6 per cent of Brickworks and 11.9 per cent of SoulPatts, having lent a small portion of the Brickworks shareholders to Carnegie as he tries to work his magic.

Williams also reportedly said that he believes the statement from Brickworks, that there is no restructure proposal within the control of the company that will definitely improve shareholder value, is a "leading statement”.

The inference is that SoulPatts has to be involved in any significant change.

Perhaps Williams should lend Carnegie some stock in SoulPatts as well.

Woolworths

The consumer watchdog has delayed its decision date on the proposal by Woolworths to acquire land just outside Penrith, after rejecting a submission from the supermarket giant.

The Australian Competition and Consumer Commission was due to rule on the acquisition of land at Glenmore Ridge, a Stockland site around Western Sydney tomorrow (November 29).

On November 19, the ACCC said it had received information from Woolworths following a request, but added the following day that the information was "incomplete”.

This still appears to be the case from the regulator’s point of view. The ACCC has been concerned for some time about the Woolworths site expansions and the Glenmore Ridge case is somewhat of a tentpole moment for the ever-tense relationship between the two.

Wrapping up

Nucoal Resources has been given the thumbs up by shareholders to raise up to an additional 25 per cent in equity as the NSW government investigates how the company secured permits from the previous state Labor government.

Chief executive Glen Lewis said the company was "well funded through until 2014” thanks to a $35.3 million capital raising earlier this year.

Tatts Group has picked up a virtual clean sweep of the lottery business in South Australia for the next 40 years. It’s a little steeper than the average keno ticket – a total of $427 million.

And in other entertainment news – if you consider all gambling entertainment – Village Roadshow has won a new five-year development deal with Warner Brothers to co-produce and finance films.

The deal is worth a total of $US1.125 billion ($1.07 billion), which is a gargantuan sum of money considering the state of the locally financed film industry.

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