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Australian shares edge higher in busy day for M&A

AAPNEWS | Mon, May 15 2023 04:33 PM AEST

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The local share market has finished slightly higher in a busy day for mergers and acquisitions, with two multibillion dollar deals announced and other takeovers progressing.

The benchmark S&P/ASX200 index on Monday finished up 10.4 points, or 0.14 per cent, at 7,267.1, while the broader All Ordinaries added 7.3 points, or 0.1 per cent, at 7,460.5.

SG Hiscock & Co portfolio manager Hamish Tadgell said the highlight of the day was Aristocrat Leisure's $1.5 billion all-cash acquisition of Nasdaq-listed US gaming software company NeoGames, giving the pokies manufacturer a foothold in the US online lottery market it had long wanted. 

The other big deal was Newcrest finally agreeing to Newmont's takeover offer, a move that will result in Australia's biggest goldminer being acquired by the world's biggest. 

The all-stock transaction values Newcrest at $28.8b, including debt, and will mean New York Stock Exchange-listed Newmont gets a secondary listing on the ASX via a Chess Depository Interest listing.

Newcrest shares finished up 1.5 per cent to $28.68, while Aristocrat rose 2.1 per cent to $39.51.

"There's been a bit of corporate activity around lately, both on the buyer and acquirer front," said Mr Tadgell, who also pointed to last week's mega lithium merger between the ASX's Allkem and NYSE-listed Livent, a $15.7b deal that will create the world's third-biggest lithium producer.

"It's picked up a little bit," he continued, referring to M&A activity.

"Companies are looking for other ways to grow at the moment, outside organic, and activity in the gold sector have clearly been driven by the gold price." Gold is currently $US2,016 an ounce.

Also on Monday, St Barbara agreed to sell its Western Australia goldmining assets, including its historic Gwalia mine in WA, to Genesis Minerals after Raleigh Finlayson's company improved its bid.

St Barbara valued Genesis' fully-funded cash and scrip bid at $604m and said it was a better offer than Silver Lake's non-binding $614m proposal, which would require financing and due diligence.

St Barbara shares climbed 3.2 per cent to 65c, while Genesis dropped 1.6 per cent to $1.255 and Silver Lake gained 7.9 per cent to $1.095.

Elsewhere, Invocare soared 12.1 per cent to $12.43 after private equity firm TPG Capital Global improved its offer for the funeral service chain to $13 a share, or $2.2 billion.  

Overall the ASX's 11 official sectors were mostly higher, although financials dipped 0.9 per cent as both ANZ and Macquarie traded ex-dividend.

ANZ fell 4.0 per cent to $23.53 and Macquarie fell 2.4 per cent to $174.84. Also, CBA dropped 0.5 per cent to $98.50, while Westpac and NAB both climbed 0.2 per cent, to $21.13 and $26.46, respectively.

The heavyweight mining sector gained 0.8 per cent, with BHP and Rio Tinto both up 0.9 per cent, to $43.85 and $108.96. Fortescue added 1.4 per cent to $20.38.

Among the other goldminers, Evolution climbed 4.2 per cent to $3.94, Northern Star gained 2.9 per cent to $13.97 and Regis Resources added 3.9 per cent to $2.15 after Macquarie predicted the price of the precious metal could shatter its all-time high of $US2,075 an ounce, set in early during the pandemic.

Elsewhere, Pointsbet plunged 21.1 per cent to $1.455 after agreeing to sell its US business to Fanatics Betting and Gamining for $US150 million ($A222m).

Elders dropped 13.4 per cent to $7.20 after the agribusiness reported its half-year profit after tax fell 46.5 per cent to $48.8m, impacted by softer livestock trading conditions, weaker crop input prices and unseasonably wet weather.

The half-year financial results have been satisfactory given the market and seasonal cycles, especially in the flood-impacted Q1," said managing director and chief executive Mark Allison.

The Australian dollar was buying 66.82 US cents, from 66.95 US cents at Friday's ASX close.

Looking forward, the minutes from the Reserve Bank's May 5 meeting where it surprised some observers with another rate hike will be released on Tuesday, giving possibly crucial insight into its thinking.

ON THE ASX:

* The benchmark S&P/ASX200 index finished on Monday up 10.4 points, or 0.14 per cent, to 7,267.1.

* The broader All Ordinaries gained 7.3 points, or 0.1 per cent, to 7,460.5.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 66.82 US cents, from 66.95 US cents at Friday's ASX close

* 90.89 Japanese yen, from 90.22 Japanese yen

* 61.51 Euro cents, from 61.27 Euro cents

* 53.58 British pence, from 53.49 British pence

* 107.44 NZ cents, from 107.02 NZ cents

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