THE DISTILLERY: Messy marriages

Big day tomorrow. A vital national decision to be made. Where to vote and which voting booth has the best snag sizzle in my electorate? I'm a snag man, some of you are coffee people, for others are it's the kids' school. For most I think it's a necessary civic evil. I'll be up most of the night researching this vital decision, with the help of a good book and a glass or two of brain soda. Before then, no election-related commentaries. Again: there are more important matters at hand. Another day of corporate initials to assess: WES, DOW GFF, PPX, PMP, QBE, BXB, AMP and, of course, BHP.

And speaking of BHP and its mate, Rio Tinto, the excellent Fairfax correspondent in China, John Garnaut, seems to have got the jump on the rest of the scribblers with this report today: "The $130 billion iron ore joint venture between BHP Billiton and Rio Tinto is in effect 'dead', according to executives. Competition regulators in Europe, Australia, China and other jurisdictions have not finalised their positions, but executives privately say it is only a matter of time. 'It died months ago,' said a senior mining executive involved in the discussions with regulators. 'It's dead and the coffin's being lowered into the ground. It's a matter of finding a face-saving way out in the coming few months.'" This will be tap-danced around by the PR flacks for both companies, but it sounds right.

Still with BHP, from the "where can I get some of that" department, Bloomberg had this scoopette overnight: "PotashCorp of Saskatchewan Inc chief executive officer Bill Doyle stands to receive $US445.4 million for his stock and options if BHP Billiton Ltd succeeds with its hostile takeover offer. Doyle, 60, held 3.43 million shares and options as of February 19 according to a company filing. He has 467,609 shares, according to the most recent data compiled by Bloomberg." And he's fighting the BHP offer?

In Sydney, Fairfax columnist Liz Knight says this morning the investment community doesn't much like this potash play by BHP: "The Australian investment community has delivered its verdict on BHP Billiton's $US40 billion ($44 billion) bid for Canadian PotashCorp -- and it is not particularly favourable. Investment banks were not prepared to put a sell on BHP -- that's a public relations no-go zone. Instead, several advised their clients to favour Rio Tinto instead... The large fall in BHP's share price over the past couple of days demonstrates this." Don't mention Ravensthorpe?

But The Australian's Matthew Stevens says poor BHP has a problem: "BHP is simply generating too much cash to sit back and allow its currently planned greenfield entree to Canadian potash, the Jansen project, to grow to maturity sometime early in the next decade or so. No matter how aggressively BHP spends on its existing portfolio of options, the company simply cannot efficiently and effectively 'deploy' its expanding reservoirs of cash on growth without pursuing acquisitions." Handing out bigger dividends would be one quick idea I can think of.

Business Spectator's Stephen Bartholomeusz was upbeat about Wesfarmer's results: "Halfway through its planned five-year turnaround of the Coles supermarket business, it is apparent that Wesfarmers is becoming increasingly confident that its high-risk pre-crisis acquisition of the Coles' retail businesses is going to produce a big pay-off in the longer term. Since Wesfarmers acquired Coles, there has been increasingly solid and consistent improvement in the performances of the brands and, critically, within the big supermarkets division, which continues to gather momentum. It is little wonder there are reports that there are divisions within Woolworths about how to respond to Coles' resurgence – whether to sacrifice margin and profit in the near-term to attack Coles or protect its own margins and profits, which remain superior, to preserve its shareholder returns."

And busy Liz Knight on the whole liked the Wesfarmers result yesterday: "The Wesfarmers retail turnaround story is not a perfect one and the progress won't necessarily be uniform. The company delivered a pretty healthy result today, which demonstrated that the remaking of the old Coles Group was progressing. Having said this, Wesfarmers' chief executive, Richard Goyder, needs to work on managing market expectations. But some analysts were disappointed in the margins that the food and liquor business reported. We already knew the sales numbers so today's full-year 2010 result revealed how much profit improvement the new management could achieve." Hmmm, "managing expectations", a thin line between fact and spin?

And The Australian's John Durie goes through the Wesfarmers numbers, looks at analyst forecasts for the various bits, and especially coal prices, and says: "Relatively speaking then, you would have to conclude that Wesfarmers is poised for a great year." Woolies reports next week.

Fairfax's Malcolm Maiden says AMP is falling behind in the race for AXA Asia Pacific: "AMP's shares fell more than 4 per cent yesterday after the group posted a disappointing June half profit, but the result underlined some home truths about the proposed takeover of AXA Asia-Pacific by National Australia Bank. One of them is that regardless of how cleverly NAB and IOOF construct their side deal for the sale of AXA Asia Pacific's high-tech, low-cost North investment platform to IOOF, an AMP takeover of AXA AP best responds to political pressure over the power of the big four banks. There's no guarantee AMP would be a 'fifth pillar' alongside NAB, CBA, Westpac and ANZ if it won control of AXA AP. It might. IOOF will not."

Fresh from his pizza fest with Domino's, The Australian's Tim Boreham put the bite on reporting industrials PMP and Paperlinx. He found their performances unappetising: "Apart from starting with P, the other common features of these stocks are that they involve paper usage and they are serial underperformers. Neither was holding out much hope of imminent improvement this morning, at least in terms of underlying demand for their product (Paperlinx is a global paper merchant, while PMP is predominantly a commercial printer and distributor of items such as advertising catalogues)."

And The Australian Financial Review's Chanticleer gives Brambles' newish boss, Tom Gorman, a pat on the back after yesterday's profit report: "Tom Gorman, the American who left Ford Australia to run sprawling logistics group Brambles, yesterday got through his first full-year profit result with a gold star from the market in the form of a sharp share price rise and positive comments from analysts and fund managers."

Watch for an ANZ update today and the US, where the news gets gloomier. Happy election.