PAPERLINX
$171m loss tip
Paper merchant PaperlinX expects to lose $171 million this year even after selling its Italian and US arms to stave off death by internet. The company said that it had reached an agreement for the $US76 million ($75.6 million) sale of its US operations, Spicers USA and Kelly Paper, to Central National-Gottesman Inc. It also announced EU competition authorities had cleared the way for the ?45 million ($55.9 million) sale of its Italian business to Lecta. The bulk of the proceeds half from the US sale and more than 70 per cent of the Italian deal will be used to pay off debts, transaction costs and fund redundancies.
APPOINTMENT
Meller to FSC
An AMP managing director has been appointed the Financial Services Council's deputy chairman. The board of the superannuation group last week unanimously elected AMP Financial Services' Craig Meller for the position. "In his over five years on the board, Craig has brought his extensive financial services industry experience to bear in the formation of industry policy and leadership," the chairman and head of Macquarie Bank's Banking and Financial Services Group, Peter Maher, said.
MERGER
Xstrata hurdle
Glencore International Plc and Xstrata Plc will probably change the terms of a planned merger before shareholders vote on it July 12 after criticism of the takeover ratio and payments to managers, HSBC Holdings Plc said. Xstrata holders will vote on Glencore's offer of 2.8 of its own shares for each one of the Swiss thermal-coal exporter and on a retention bonus of as much as #172.8 million ($270 million) to keep 73 Xstrata executives at the merged company. A decision going against either proposal would block the deal. The payments created "specific problems", according to Andrew Keen, a London-based analyst at HSBC, and this should be separated from the merger vote.
BEER
InBev new bid
Anheuser-Busch InBev NV's push to acquire full ownership of Grupo Modelo SAB is moving the beer industry into the final stages of a decade-long consolidation. AB InBev, the world's largest brewer, said yesterday it was in talks with Modelo, the Mexican company of which it owns 50 per cent. AB InBev could pay $20 billion for the outstanding stake, according to a person familiar with the matter, who declined to be identified because the discussions are private.
Frequently Asked Questions about this Article…
How much is PaperlinX expecting to lose this year and what’s causing the PaperlinX loss?
PaperlinX expects to lose about $171 million this year. The company says the loss comes even after selling some businesses — moves it describes as measures to 'stave off death by internet' as demand and competition have affected its paper merchant operations.
Who bought PaperlinX’s US operations (Spicers USA and Kelly Paper) and what was the sale price?
PaperlinX reached an agreement to sell its US operations, Spicers USA and Kelly Paper, to Central National-Gottesman Inc. for US$76 million (reported as $75.6 million).
Who bought PaperlinX’s Italian business and how much did Lecta pay?
EU competition authorities cleared the sale of PaperlinX’s Italian business to Lecta for €45 million, which the article reports as approximately $55.9 million.
How will PaperlinX use the proceeds from the US and Italian asset sales?
The article says the bulk of proceeds — around half of the US sale and more than 70% of the Italian deal — will be used to pay off debts, cover transaction costs and fund redundancies.
Who is Craig Meller and what appointment did he receive at the Financial Services Council?
Craig Meller, an AMP managing director, was unanimously elected by the Financial Services Council board as the council’s deputy chairman. Peter Maher of Macquarie Bank praised Meller for bringing extensive financial services industry experience to the board over more than five years.
What are the key terms of the proposed Glencore and Xstrata merger that shareholders will vote on?
Xstrata shareholders will vote on Glencore’s offer of 2.8 Glencore shares for each Xstrata share and on a proposed retention bonus of up to £172.8 million (about $270 million) to retain 73 Xstrata executives. The vote is scheduled for July 12, and a rejection of either proposal would block the deal.
Why might Glencore and Xstrata change the merger terms before the shareholder vote?
The companies are likely to revise terms after criticism of the takeover ratio and the proposed payments to managers. HSBC and its analyst Andrew Keen flagged the payments as creating 'specific problems' and suggested separating them from the merger vote.
What is Anheuser-Busch InBev (AB InBev) planning with its stake in Grupo Modelo and what could it cost?
AB InBev, which already owns 50% of Grupo Modelo, is reported to be in talks to acquire the remaining stake and could pay about $20 billion for the outstanding interest, according to a person familiar with the private discussions.
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