THE DISTILLERY: Echo reverberations

Jotters speculate on the significance of a deal between Echo, Crown and shareholders, and diverge in their view of BHP's Kloppers.

It's remarkable the difference a new chairman can make. Under John Story, Echo Entertainment was constantly trading blows with James Packer and Crown. Now, with John O'Neill calling the shots, boxing gloves have been exchanged for cigars and brandy, as the rival casino operators apparently cosy up to discuss alliance options. This morning, the commentariat debates whether those talks might run deeper than a VIP joint venture, or if the media is getting too carried away. Elsewhere, more dirt is piled on BHP's poor old chief, Marius Kloppers, while Telstra's image receives a polish.

But first, following talk of a VIP partnership between casino operators Crown and Echo, Fairfax's Elizabeth Knight believes there's also a possibility of a three-way ownership split between Crown, fellow shareholder Genting, and minority investors.

"The plan is that each of the gaming heavyweights would own 25 per cent, with minority shareholders owning the remaining 50 per cent. This would presumably pave the way for Mr Packer to realise his dream of using Echo's casino licence in New South Wales to build a second casino at Barangaroo on Sydney's CBD foreshore. The scenario would fit in with both Genting and Crown seeking NSW regulatory approval to increase their holdings beyond 10 per cent. Crown's decision to seek up to 25 per cent is also in keeping with the plan."

However, The Australian's John Durie is reserving his judgement on Crown-Echo deal rumours. As he puts it: "A VIP joint venture may happen and the Sydney Swans may win the AFL flag this year … it's early days yet."

"It's been some weeks since [Genting's] KT Lim was last in town, Packer still needs to get approval to get to 20 per cent-plus of Echo, he needs to buy the shares and any deal must stack up for Echo shareholders who, of course, include Lim and Packer. Before all of that happens, the two sides need to actually formally canvass the issue."

A weekend report that BHP Billiton plans to delay its $30 billion expansion of Olympic Dam has also won plenty of attention, although not, as Fairfax's Malcolm Maiden points out, from the miner's chief executive. The commentator takes a swipe at the Kloppers' silence, given the market-moving nature of the story.

"This vacuum needs to be seen in the context of a company that seems increasingly uncertain about everything – employee numbers, expansion plans, capital management, the state of its main customer, the outlook for its key commodities and the performance of its CEO. Last week the Fin Review got hold of the supposedly confidential Corporate Confidence Index which showed major investors' rating of Kloppers performance has been declining throughout his five years in the job. The failed takeovers, the billion-dollar Yabulu gift to Clive Palmer, and the US shale gas purchase at what increasingly looks like the top of the market don't make happy reading."

At Business Spectator, Stephen Bartholomeusz seems to be more understanding.

"There is something of an anti-Kloppers push developing, which might explain the focus on an impairment charge – it would appear embarrassing if BHP fessed up to overpaying for assets so soon after they were acquired – but BHP isn’t a trading company and the ultimate judgment of its strategic plunge into shale gas shouldn’t be made within 18 months… There is a sense that, whether it’s fair or otherwise, the market has taken a dislike to Kloppers despite his success in guiding BHP through the financial crisis, delivering a massive series of new projects largely on time and within sight of budget and emerging as the dominant force in the sector."

Telstra is also in focus, following upbeat comments from chief executive David Thodey and a share price recovery to pre-NBN highs. The Australian Financial Review's Jennifer Hewett attributes that to new confidence that Thodey "has options, and cash," to respond to Labor and Liberal telco policy.

Hewett's paper-mate, Tony Boyd, latches onto a high-tech epiphany by Thodey, who wants Australia to become a "clever country" by investing in innovative technologies. Boyd says you only need look at the mining industry for signs Australia is already excelling.

Meanwhile, Fairfax's Ian Verrender examines the newly rocky relationship between the Australian dollar and commodity prices. But while the currency's liquidity and safe-haven appeal for offshore central banks is providing strong support, Verrender thinks it "inconcievable" that the Aussie could completely divorce itself from resources long-term.

Fairfax's Adele Ferguson runs an eye over the sale of NSW's Port Kembla Corporation, outlining a likely price and a list of rumoured bidders.

And finally, The Herald Sun's Terry McCrann thinks recent comments out of the eurozone about doing whatever it takes to keep the region together, as well as money printing, are nothing more than "sugar hits" for markets. At best, McCrann says, they're "useless". At worst, he worries they are actually making the problems worse.

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