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Arrow Energy Limited (AOE) recommended shareholders accept a revised takeover offer from joint bidders Royal Dutch Shell and PetroChina (CSCo). The company said, if implemented, shareholders would receive one share in a new listed entity, Dart Energy Limited, and cash of $4.70 per share, up from a previous offer of $4.45 per share.

Arrow said its directors have stated that they intend to vote in favour of the schemes, in the absence of a superior proposal, and subject to the Independent Expert stating that in its opinion, the schemes are in the best interests of Arrow Energy shareholders.

The company said the cash component alone represents a 35% premium to both the last closing price and one month volume weighted average price prior to 8 March 2010 when the original non-binding, indicative and conditional proposal from CSCo was received.

Arrow said a new entity would be created by a demerger of Arrow’s international business and certain Australian assets into a new company to be named Dart Energy Limited.

The company said Dart Energy is to be listed on the ASX and would comprise Arrow Energy’s 90% interest in Arrow Energy International Pte Ltd, which holds the existing portfolio of international assets in China, India, Vietnam and Indonesia and certain Arrow Energy stakes in listed ASX companies.

Arrow said Shell would retain its 10% interest in Arrow’s existing portfolio of international assets, while the existing Arrow Energy management team would lead Dart Energy.

Arrow chairman, John Reynolds, said the transaction crystallises the value of more mature assets that have been built in Arrow's Queensland business through the rigorous execution of our business strategy.

”In addition, we are creating an exciting opportunity for Arrow Energy shareholders to continue to participate in a portfolio of earlier-stage development assets in Australia and the broader Asian region,” Mr Reynolds said.

CEO, Nick Davies, said Dart Energy has the opportunity to become a leading global coal seam gas company.

”The existing portfolio of assets and additional opportunities we have in the pipeline provide a great platform to replicate our Queensland success,” Mr Davies said.

Arrow said it has commenced the process to demerge its international business, while the demerger scheme is not conditional on the acquisition scheme.

“While accelerating this demerger activity we have significantly enhanced the asset package for the proposed demerger through removal of the Shell back in rights into international projects, planned addition of the Dajing PSC in China, addition of the shareholdings in a number of ASX listed companies and NSW CSG interests, and the injection of $70m in cash and funding into the business,” the company said.

The demerger and the acquisition will occur under two separate court approved Schemes of Arrangements.

Arrow Energy shares were halted at $5.29.

RBS – Round Up – 220310

OneSteel Limited (OST) said its Recycling business has signed an agreement for the purchase of the Metals Trading business. The company said Metals Trading is a scrap dealer with businesses in New South Wales and Victoria and is a supplier to OneSteel’s Recycling business. OneSteel said the company collects approximately 120,000 tonnes of ferrous scrap and 30,000 tonnes of non-ferrous scrap per annum. The company said the acquisition is subject to clearance from the Australian Competition and Consumer Commission. 

Mineral Resources Limited (MIN) said it intends to make a recommended off-market takeover bid for all of the shares in Mesa Minerals Limited (MAS). Mineral Resources said the offer is one MIN share for every 70.6 Mesa shares, valuing each Mesa share at 10.25c, based on the last traded price of MIN shares on 19 March 2010 of $7.24.The two companies have entered into a letter agreement in relation to the offer under which the directors of Mesa have unanimously recommended the takeover offer.

White Canyon Uranium Limited (WCU) announced that it has concluded the purchase of 93 mineral tenements in the White Canyon district of Utah, USA from Canadian listed company Uranium One for US$60,000. The US-focussed uranium production company said the acquisition increases its landholding in Utah from 12,000 acres to approximately 14,000 acres with in excess of 1,200 additional acres at Red Canyon and more than 750 acres at Geitus. 

JPMorgan has downgraded Incitec Pivot (NEUTRAL, price target $3.77), arguing the diammonium phosphate ("DAP") price momentum has stalling and is beginning to reverse. From a comparative valuation perspective, the broker notes that IPL is trading at a significant premium to peer Orica.

JPMorgan said that after surging from US$285/t in late Oct09, DAP prices stabilised around the US$500/t level. The broker also highlights recent reports that suggest DAP prices have started declining.

In addition, JPMorgan said that price weakness on the fertiliser side of IPL’s business is unlikely to be offset by the performance of its explosives unit. The broker said the business faces demand downside in the US with volume weakness also likely in Australia.

The broker says that IPL is unlikely to outperform in the short-term, with its sum-of-parts valuation coming in below its current share price. The broker notes that IPL is trading slightly below its average valuation but that sum-of-parts was a better short-term measure.

Credit Suisse downgrades MSL to NEUTRAL with a price target of $3.05.

Premier Investments Limited (PMV), owners of the Just Jeans brand, reported a 13.7% fall in profit to $42.4 million for the half-year ended 30 January. Looking ahead, Premier Investments said it was cautiously optimistic about achieving ‘acceptable margin growth’ in the second half of the year, given the company’s strong brand.

However, given what Premier Investments said was a ‘challenging’ environment for retailers, including the prospect of ongoing interest rate rises, the group declined to forecast earnings figures for the second half of the year.

Supporting the group’s optimism, Premier Investments said it had $325.5 million cash in the bank and had reduced debt by around $45 million in the last year to $75.4 million.

Looking at the result for the last six months, Premier noted that its 1H2010 comprised 27 weeks, with 1H2009 being 29 weeks and 5 days, as Premier moved its year end to 25 July 2009, in line with Just Group’s year end.

Chairman, Solomon Lew, said the excellent results had been posted by Just Jeans, Dotti and Smiggle.

On the downside, the company described the result by Portmans as ‘very disappointing’.

Excluding Portmans, the group reported like-for-like sales up 4.7%, whereas including Portmans, like-for-like sales were up a more modest 1.1%.

Just Group’s sales for the 27 weeks to 30 January 2010 were up a strong 9.3% on 1H2009 to $473 million, the company said.

“Building on the momentum produced by the leadership team at Just Group, Premier will be focusing on achieving consistent out-performance across all Just Group brands, with particular attention to lifting Portmans’ performance to match the returns from other brands in the portfolio,” Mr Lew said.

The board declared a dividend of 39c per share, including a 20c per share special dividend.

At the close Friday, Premier Investment shares were trading at $9.01.

Australia and New Zealand Banking Group Limited (ANZ) announced it had completed the acquisition of The Royal Bank of Scotland’s (“RBS”) retail and commercial businesses in Hong Kong. The company also announced the launch of a new service known as ANZ Signature Priority Banking, which is to be rolled out across Asia Pacific over the next 18 months.

ANZ said the purpose of ANZ Signature Priority Banking was to meet the needs of affluent retail customers, with the first branch to open in Central Hong Kong at the International Finance Centre.

The company said the new service is available for individuals in Hong Kong with assets greater than HK$1 million to invest.

ANZ CEO Asia Pacific, Europe and America, Alex Thursby, said the RBS integration is progressing to plan and that the company was focusing on growing its commercial banking business in Hong Kong.

“ANZ has a very strong heritage in commercial banking, and we’ll provide a relationship-led service for our new commercial clients, backed by our institutional product range and network across more than 30 countries globally,” Mr Thursby said.

The company said re-branded the former RBS Hong Kong branches and brought customers and staff across to ANZ, adding that RBS customers retain their existing relationship managers and can continue to access branches, ATMs and internet banking facilities as usual.

The Hong Kong acquisition is the third of six markets to transition to ANZ ownership after the RBS acquisition was completed in the Philippines and Vietnam in late 2009.

ANZ said it is acquiring the RBS retail and commercial businesses in Taiwan, Singapore, Indonesia and Hong Kong, and the institutional businesses in Taiwan, the Philippines and Vietnam.

Ath the close of trade Friday, ANZ shares were trading at $25.11.

AXA Asia Pacific Holdings Limited (AXA) and National Australia Bank Limited (NAB) announced that they have extended an agreement related to the proposal by NAB to acquire 100% of AXA APH until 29 March 2010. AXA APH said the proposal includes the acquisition of AXA APH’s Australian and New Zealand businesses, and the divestment of AXA APH’s Asian businesses to AXA SA.

In separate statements the companies said the notes that the discussions to agree final transaction documents to implement the proposal between AXA APH, NAB and AXA SA are at an advanced stage.

The company added that the Independent Directors continue to unanimously recommend the proposal in the absence of a superior proposal and subject to the opinion of an independent expert.

The proposal remains subject to shareholder approval, and approval from Australian, Asian and New Zealand regulators, and other conditions.

At the close of trade Friday, AXA APH shares were trading at $6.29, while NAB shares were trading at $26.90.

Wall Street ended an eight-session winning streak Friday as a disappointing result from Palm dragged the NASDAQ lower. Meanwhile, commodity prices felt the affects of a stronger greenback.

The Dow Jones shed 37.19 points, or 0.35%, to 10,741.98, the S&P 500 dipped 5.92 points, or 0.51%, to 1,159.90 and the NASDAQ lost 16.87 points, or 0.71%, to 2,374.41.

Financials were mainly lower. Citigroup and Bank of America fell 3% and 1.5%.

Palm slumped 29.2% after the smartphone maker reported a larger than expected quarterly loss and added that current quarter revenue would be negatively impacted by a large build-up in inventory.

Research in Motion lost 1.9%.

Of the major tech stocks, Apple and Google weakened 1.1% each. 3M fell 2%.

Energy stocks tracked the price of crude lower. Exxon Mobil and ConocoPhillips slid 0.5% and 0.7%. Chevron bucked the trend, adding 0.3%.

NYMEX light crude oil for April delivery fell US$1.52 to settle at US$80.68 a barrel.

COMEX gold for April delivery fell US$19.90 to settle at US$1,107.60 per ounce.

European Markets

European stocks lost ground as resource stocks dragged due to a fall in commodity prices. A positive forecast from UK bank Lloyds limited gains.

Greece’s debt issues continued to be the focus as the European Union's leaders were asked to agree on a standby aid package for Greece.

The benchmark UK FTSE 100 added 7.51, or 0.13% to 5,650.12. The French CAC40 shed 12.74, or 0.32% to 3,925.44, while the German DAX dropped 29.88, or 0.50% to 5,982.43. 

Lloyds climbed 8.2% after saying it would return to profitability this year. Peers Royal Bank of Scotland and Barclays jumped 4.8% and 1.3%.

Societe Generale advanced 0.8%.

Miners fell in late trade. Antofagasta, Anglo American and Xstrata shed 1.6%, 2.5% and 2.3% respectively.

Rio Tinto and BHP Billiton lost 1.6% and 1%.

Energy players Total and Royal Dutch Shell dipped 0.5% and 0.3%. BG Group gained 1%.

Japanese Markets

Japan’s Nikkei advanced on the back of better than expected jobless and manufacturing data out of the US. The Nikkei ended higher for the sixth consecutive week.

The Nikkei 225 rose 80.69, or 0.75% to 10,824.72. 

Sony and Canon put on 2.6% and 2.4%. Kyocera advanced 1.8%.

Camera maker Nikon dropped 3% on a broker downgrade.

Mazda, Toyota and Honda gained 2.5%, 2% and 1.6% respectively.

Retailer Aeon added 2.4% as the company forecast a better than expected operating profit for the full-year. 

Among the financials Mizuho and Mitsubishi UFJ Financial rose 1.1% and 0.4%.

Developers weakened after Japan’s land prices fell to its lowest level in 36 years. Mitsui Fudosan Co. and Mitsubishi Estate shed 1.8% and 2%.

Hong Kong Markets

The Hang Seng edged higher Friday closing close to the eight-week highs seen earlier in the week. The major news was from former Rio Tinto suitor, Chinalco, which said it was creating a joint venture with Rio Tinto to develop a mine in Africa.

The Hang Seng rose 40.15, or 0.19% to 21,370.82.

The news of the Chinalco/Rio tie-up sent that stock 3.3% higher, after announcing its intention to pay US$1.35 billion for a stake in Rio Tinto’s Simandou iron-ore project in Guinea.

Amongst the banks, Bank of China added 1% even, while heavyweight lender ICBC added just 0.2%.

HSBC retreated 0.6%.

Property stocks were stronger with New World, Cheung Kong and Hang Lung Properties added between 1% and 2.2%. House prices in Hong Kong have rallied strongly this year.

Elsewhere, China Eastern Airlines, rallied 4.2% after outlining growth plans to the market.

Container line, Orient Overseas slumped 2.9% after posting a big loss for the 2009.