Final hurdle for Alcan sale to Amcor

Following the sale of Alcan's Americas business for $US1.2 billion ($1.5 billion), analysts are convinced that the purchase by Amcor of the remaining Alcan assets is now in its end stages.

Amcor, which bought Alcoa's packaging division for $3.1 billion in December 2007, said in February that it was in talks to acquire part of Rio's unwanted Alcan packaging business.

The latest sale to Bemis leaves more than two-thirds of the Alcan assets still on the auction block, including food, tobacco and pharmaceutical packaging operations in Europe. But Merrill Lynch analysts warn that anti-competitive concerns might prevent Amcor from buying some of the Alcan assets because the two companies are the biggest operators in tobacco, food and pharmaceutical packaging.

Merrills puts a price tag of about $US2.5 billion on the remaining Alcan assets. However, Royal Bank of Scotland analysts believe anti-competitive concerns in countries such as Britain could be overcome through selective asset sales.

The analysts calculate that Amcor is attempting to buy the remaining assets for about $US1.95 billion. "Amcor looks to be in a prime position to acquire strategically valuable assets at highly attractive prices," the RBS analysts said.

But they pointed out that the fact that Amcor has been unable to agree a deal at the same time as the Bemis sale suggested the Australian packaging giant and Rio were still at odds on price. In Amcor's favour, RBS doubts a rival offer for the remaining Alcan assets will be forthcoming.

Shares in Amcor closed up 2c at $4.69.

The great outdoors

Some sectors of the retail market are understandably doing it tough in the downturn, but other parts are lapping up the desire of consumers to make their dollars go further.

Take Super Cheap Auto, whose activities not only include the install-it-yourself car parts business but also BCF (better known as boating, camping and fishing). Drivers are flocking to Super Cheap Auto's stores attracted by its cheap prices and the opportunity to cut maintenance bills. Macquarie Research is predicting double-digit growth in the chain's contribution to group profits when Super Cheap Autos reports its full-year result.

But the real stand-out in what is likely to be a $30 million net earnings figure will be BCF, which focuses on the three main leisure activities that are benefiting from stay-at-home holiday-makers. Described by Macquarie as the sector's "stand-out performer", BCF is expected to have pulled in sales of $206 million, a 32 per cent increase on the corresponding period. It has been helped in part by the opening of 10 new stores out of a chain now numbering 59.

But just as impressive is likely to have been a two-thirds increase in pre-tax earnings to $18 million as margins benefit from lower start-up costs, more direct sourcing of goods and BCF's selection of exclusive and own-brand products.

And with at least 10 more stores set to open in the next year or so, it seems that life by the side of the road and the edge of the water will continue to pay off. Super Cheap shares rose 2c to $3.66 yesterday a 72 per cent increase since March.

Centro demand

Centro Properties could be heading back to court after it received a requisition for an extraordinary meeting from a private investment group.

A notice from Centro yesterday said Margaret Lou, of Lumar Investments, and her associates, who collectively hold 5 per cent of the retail landlord's register, want to elect three directors, Li Zhang, Kieron Strahan and Yik Fan Ngai, to the board.

Centro's general counsel, Elizabeth Hourigan, said the board would review the validity of the Lumar request before making any firm decisions. The embattled property group is already battling a million-dollar class action, not to mention the biggest enemy: the global financial crisis.

Qantas turbulence

Qantas boss, Alan Joyce, has been pulling almost any lever he can to steer the carrier through the worst travel downturn of the jet age. But Royal Bank of Scotland analysts believe "significant challenges remain" for Qantas because of heavy discounting of fares and an almost doubling in the oil price since February.

Despite a slowing in the rate of decline in passenger demand, RBS believes air fares are likely to remain weak for the "foreseeable future".

The big problem for airlines hoping for an increase in travel demand is rising unemployment. "Those still travelling are likely to be looking for greater value [lower fares] from their holiday spend. We therefore see yields remaining under pressure," RBS said.

"The risks of rising unemployment and household deleveraging could continue to pull demand down further, which may necessitate a further round of capacity cuts." Qantas closed up 2c at $3.66.

Bad news day

The future of APN News & Media's key shareholder looks to be on increasingly shaky ground. Independent News & Media, which owns London's Independent newspaper, has appointed one of its advisers, Deloitte, as a standby administrator in the event that debt-restructuring talks fail, according to a report in The Times. The publisher is desperate to refinance a ?200 million ($409 million) bond by the end of the month.

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