THE LAST GASP: Spinning DJs
This week David Jones gets courted by a man with an office, Clive Palmer and Tony Abbott make up and Barclays is in the bad books.
That’s nice. And you were?
A series of interesting events this week allowed David Jones shareholders to feel a variety of emotions as the price of the stock swung about wildly, ranging from elation to despair before setting on mostly confusion. The saga, and boy did it become one, began on Monday with the surprise announcement that DJs had received a $1.65 billion takeover offer from unknown British group EB Private Equity.
The department store group was sceptical at first, and kindly asked for more information about the suitor’s management, funding plans and specifics of the offer itself. It was a nice way of saying they had no idea who the hell those people were. A bit of digging from various sources revealed the company consisted of a man, Scottish entrepreneur John Edgar, a basic website and an address, reportedly located between a wig shop and a noodle bar in Newcastle. Hardly the assets of an industry giant.
Following days of speculation, EBPE withdrew the bid, claiming the amount of attention the offer had received made proceeding too difficult. This was the same group that contacted a Sydney public relations firm to get to word of the bid in the local papers. David Jones said that following the withdrawal, no further discussions with EBPE were anticipated. It was a nice way of saying they never expect to hear from whoever the hell that was again.
It could be worse
The entire episode left a sour taste in the mouths of investors, and the offer is now quite rightly the subject of an investigation by the Australian Securities and Investment Commission. Several reports have questioned the authenticity of the bid, and the man who spearheaded it. The Scotsman has been linked throughout the week to a number of sketchy shell companies, including a beverage group that claims to sell a brand of vodka for over $5 million a bottle. Basically, the kind of things that inspire only confidence in potential takeover targets. The saga would be more funny if it wasn’t so serious and the implications so severe. Unless, of course, if it turns out that EBPE were serious, but simply incompetent, and David Jones just royally screwed up a genuine $1.65 billion takeover offer.
Run for the hills
Creeping through the streets and destroying the very fabric of Australian society, the federal government’s carbon pollution reduction scheme finally reared its ugly head this week, to the rage of many who barely understand it. Public protests were held in Sydney and Melbourne, with about 150 marching in the Victorian capital and close to 2000 turning up in New South Wales, where they are all a little bit more backward. Famed broadcaster Alan Jones spoke to the modest crowd gathered outside the Victorian parliament, calling the tax a veritable hoax and witchcraft. No doubt the humour of a conservative white man describing something new as a form of dark magic was lost on most in attendance.
Run for wherever will take him
Mining magnate and burgeoning political candidate Clive Palmer has announced he is considering running for the Liberal Party in Bob Katter’s federal seat of Kennedy, putting him in direct competition with the independent MP. The billionaire has declared the days of the independents over, which would undoubtedly have Katter, who has held the seat since 1993, quaking in his boots. Palmer has given away his push for Wayne Swan’s seat of Lilley, claiming that opposition leader Tony Abbott asked him not to, and he agreed, given the great respect between the two. The kind of respect that was on show only last week, when the two men were embroiled in a heated argument and one was linked to a coup of the party.
Any thoughts that the local banking custom of crying poor while raking in billions of dollars in profit was the most ethically questionable financial practice going on in the world were put to bed this week. It turns out that the alleged routine and institutionalised fraud at one of Britain’s biggest and most well known companies, Barclays Bank, is much worse than that. The scandal centres around the manipulation by banks of the London Interbank Offered Rate, or Libor, and has seen the bank cop a $450 million fine. Basically, the allegations boil down to rich people ripping off other rich people to get richer. The buggers. The story gets worse when you consider that the allegations were first raised in April 2008, which led to an admission by a senior Barclays treasury manager that the bank had been fiddling with its rates, though not as badly as some of its competitors. The scandal is expected to lead to changes in the law surrounding Libor, which should take at least months for the banks to work out how to take advantage of.
There is no cow level
Visiting Indonesian President Susilo Bambang Yudhoyono has pressed Australian companies to invest more in its local cattle industry, as the country looks to move toward more self-sufficiency in beef production. The stance is aimed at easing tensions between the nations that arose during Australia’s live cattle export ban last year. The move is seen as good news for the local cattle industry and the Indonesians. In fact, the only ones not benefitting from the situation appear to be the cows.
– Just when you thought Australian politics couldn’t get more embarrassing, someone had the bright idea of urging Trade Minister Craig Emerson to sing made-up lyrics to a classic Skyhooks song criticising the opposition’s anti-carbon tax campaign.
– Not everyone was too beaten up by the implementation of the carbon tax, with bakery group Brumby’s – which sent a memo to all its franchisees urging them to lift prices and blame it on the levy – seemingly eyeing it as an opportunity... to rip people off.
– The artist formally known as OneSteel officially changed its name to Arrium Ltd this week. Despite the change, the company is still heavily in debt in a rapidly dying industry and the smell of roses remains the same.