L1 proposes Platinum merger; Tesla seeks Musk successor; Bonkers rally
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In today's news, L1 Capital buys Kerr Neilson's Platinum stake and proposes a merger, Tesla seeks a successor to take over from Elon Musk, and a market rally looks bonkers as the US economy shrinks.
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West Australian
a day ago
- West Australian
Ben Harvey: Foreign ownership of oil and gas assets is nothing new
The United Arab Emirates has more oil than a Sean Combs freak-off, so why is it sniffing around Australian energy company Santos? And why would the UAE offer to pay such an astonishing premium (a full 28 per cent above Santos' then market value) to acquire a business that's 10,000km from home and in a different hemisphere to boot? Anyone who doubts the world's ongoing dependence on fossil fuel should think about the logic of this takeover bid. Abu Dhabi's ruling Nahyan family didn't become billionaires 300 times over by writing cheques. They aren't fools and they don't part with their money readily. This week's $36b bid for the Kevin Gallagher-led LNG and domestic gas business isn't chump change, even for the Arabs. So, what do they know about this 'legacy' business that we don't? It's got to be a hedge against the turmoil in the Middle East, right? The wide-open sea lanes of the Indian and Pacific oceans must look like a cake walk compared with the Strait of Hormuz. The most dangerous thing an LNG tanker will run into around Australia will be an Indonesian fishing vessel that's drifted off course. There's no chance of being targeted by Houthi rebels or accidentally strafed by aircraft launching from the USS Nimitz carrier strike group. Geographical diversification seems a logical reason for the UAE play but the geo-political imperative doesn't explain the timing. Sure, Tehran and Tel Aviv have spiced things up of late, but when was the Middle East not engulfed by turmoil? It's been a war zone pretty much every day since the first kibbutz was established in 1948. Yet in all that time — through the Arab-Israeli war, Egyptian revolution, Suez crisis, the Lebanese civil war, Iran-Iraq war, the Iranian revolution, Gulf War 1, Gulf War 2 and countless other skirmishes and crises — the oil-rich provinces rarely looked outside their own backyard for investment opportunities in the fossil fuel game. Certainly not this far outside their backyard. Take risk-defraying out of the value equation and you are left with one upside: the UAE reckons the world is going to be dependent on hydrocarbons, and natural gas in particular, for a long, long time. Santos shareholders, including dominant stockowner L1 Capital, clearly aren't as confident in a CO2-soaked future because they were falling over themselves to accept the bid. The only thing standing in the way of shareholders and a fat profit is the Foreign Investment Review Board, which has to tick off on the sale to foreign entities of Australian assets that are economically or politically sensitive. The deal will give the FIRB pause for thought because Santos owns some important stuff. The company runs the Darwin LNG plant, supplies one sixth of WA's domestic gas and owns and fills the pipelines that feeds the east coast energy system. It is also Australia's most aggressive oil and gas play. At a time when fossil fuel executives are desperately trying to pass themselves off as windfarm manufacturers, Gallagher stands out as a 'drill, baby, drill' kind of guy. Billy Bob Thornton could well have had an eye on Gallagher when he got into character in the TV series Landman. Drill, make as much money as possible, spud and move on to the next prospective patch of the outback or sea floor. Rinse and repeat. He is Greta Thunberg's worst nightmare and he cares not one jot about that. Gallagher's solution to the current supply crunch is simple: more exploration permits. His insistence that Australia can drill its way out of trouble is relevant to the UAE takeover because Gallagher has spent the past few years bagging the Federal Government's 'soviet' energy policy. With $50m on the table (at the $8.89 offer price that's the value of the Santos stock he has in his family trust, employee equity scheme and short-term incentives) Gallagher's likely trying to bleach those remarks from the internet, lest Jim Chalmers chances upon them whilst considering the impending FIRB recommendation. Shareholders will also be hoping the Treasurer doesn't make this decision personal. Chalmers will almost certainly feign concern about foreign ownership, especially by a State-run entity. XRG, which is the name of the bidder, is a subsidiary of a national oil company owned by the Government of Abu Dhabi, which trades under the imaginative name Abu Dhabi National Oil Company The word 'feign' is used advisedly because the reality is foreign ownership of Australian oil and gas assets is nothing new. Only 43 per cent of Santos is owned by local shareholders; the Americans have the rest. It may be headquartered in Adelaide, but Santos' financial heart is in the US. Australia's most important energy asset — the North West Shelf — might be operated by Woodside but it is owned by London-headquartered BP and Shell, Californian supermajor Chevron, Beijing's China National Offshore Oil Corporation and Japan Australia LNG. Woodside itself is only 55 per cent Australian owned, with almost half its stockholders residing in the US and the UK. The Dampier-to-Bunbury pipeline, which brings gas from the NW Shelf to southern WA, is owned by a Hong Kong national — billionaire Li Ka-Shing. The Ichthys project in water off Broome is run by Japan's INPEX and the Gladstone LNG plant is a joint venture between Santos, Malaysia's Petronas and South Korea's KOGAS. What difference will another flag make?
News.com.au
a day ago
- News.com.au
Car giant's space fight with Musk
One of the world's biggest car makers has joined Elon Musk in the race to the stars. Honda has officially entered the space race alongside Musk's Space X, after Japan's second largest carmaker announced it had successfully launched a 'resusable rocket prototype'. In the same week, a Space X rocket dramatically blew up while preparing to take flight, Honda showed it was serious about its space exploration ambitions, first mentioned four years ago. Honda R&D, which is a subsidiary of Honda Motor Co. said it 'conducted a launch and landing test of an experimental reusable rocket developed independently by Honda'. The rocket, which was 6.3m long, 85cm in diameter and weighed 1312kg, reached an altitude of 271.4m and landed within 37cm of the target touchdown point after a flight of 57s. According to Honda R&D, the purpose of the test, conducted at a Honda facility in Taiki Town on Hokkaido, the northern most of Japan's main islands, was the 'establishment of key technologies necessary for a reusable rocket'. 'This test marked the first launch and landing test conducted by Honda with an aim to demonstrate key technologies essential for rocket reusability, such as flight stability during ascent and descent, as well as landing capability,' Honda said in a statement. 'Through this successful test, Honda achieved its intended rocket behaviours for the launch and landing, while obtaining data during the ascent and descent.' Honda announced in 2021 that it was 'pursuing research and development in the field of space technologies' with the thought that its discoveries could also be used in Honda vehicles. That includes in regard to automated driving systems and sustainable transportation. Honda is aiming at a suborbital launch by 2029. 'We are pleased that Honda has made another step forward in our research on reusable rockets with this successful completion of a launch and landing test,' Global CEO of Honda Toshihiro Mibe said. 'We believe that rocket research is a meaningful endeavour that leverages Honda's technological strengths. 'Honda will continue to take on new challenges—not only to offer our customers various services and value through our products, while addressing environmental and safety issues, but also to continue creating new value which will make people's time and place more enjoyable.'
AU Financial Review
a day ago
- AU Financial Review
Birmingham new ABA chief; PwC profit slumps; 50 best restaurants
Want to get this in your inbox at lunchtime every weekday? Financial Review subscribers can sign up for The Brief newsletter here. Plus start your day with our Before the Bell newsletter and read a full wrap of the day's news in Market Wrap. In today's news, Simon Birmingham is the Australian Banking Association's new chief, PwC Australia's profit slumps 17 per cent, and the world's 50 Best Restaurants for 2025 have been revealed.
