Future Fund set to help Canadian pension funds buy Transurban, Shares slip: Economy Roundup

Meanwhile, the Future Fund has said it is in talks with the Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan to help support their $6.77 billion bid to purchase toll road operator Transurban.

“We are pleased to confirm we are in preliminary discussions with the Future Fund in relation to their possible support of the proposal by CPPIB and OTPP to acquire Transurban,” the two groups said in a joint statement. “We continue to believe that $5.25 per Transurban security provides Transurban security holders with compelling value for their investment.”

“No commitment or understanding has been reached for the board of guardians to make an investment or participate in the proposal with CPPIB and OTPP as discussions are still preliminary,” the Future Fund told The Age.

“On 5 November 2009 Transurban rejected CPPIB and OTPP’s indicative proposal on the grounds that it proposed an inadequate price and unacceptable conditionality. Nothing has occurred subsequent to our rejection that changes Transurban’s view,” the company said.

In the mining industry, falling iron ore price and shipments into China could be a precursor to the country aligning itself for settlements and contract talks in 2010, sources have told Reuters.

The China Iron and Steele Organisation, the chief cost negotiator, could hold a significant amount of bargaining power if demand rises.

“Everyone thought CISA was being cleverer than they actually were,” a source said. “They should have settled early last year before things recovered. And I think they will have learned from that lesson.”

Shares slightly lower

The Australian sharemarket has opened slightly higher today after similar results in the US where investors were encouraged by new export data.

The benchmark S&P/ASX200 index was up 21 points or 0.46% to 4627.8 at 11.55 AEST, while the Australian dollar also grew by 0.5% to US91c.

Commonwealth Bank shares gained 0.5% to $52.76, while ANZ also rose 0.2% to $21.54. Westpac rose 1.1% to $24.02 as NAB rose 1.4% to $28.38.

Also reported in The Age, pallet manufacturer Brambles is expected to announce an executive board shake up, with Asia-Pacific group president Craig Van Der Laan rumoured to have resigned from his position.

In the telecommunications industry, communications spokesman Stephen Conroy has said the National Broadband Network Company and Telstra could reach an agreement regarding the sale of the telco’s infrastructure by Christmas.

Conroy said the talks are “very constructive…We have been working on this for three or four months now and we believe we will have substantial progress to announce before Christmas”.

The two entities have been in discussions for months. The Government hopes to purchase parts of Telstra’s wholesale infrastructure in order to speed up construction of the NBN, significantly reducing price. However, Telstra has reportedly been hesitant to sell.

Federal Court allows Felix Resources deal

Additionally, the Federal Court of Australia has ruled Felix Resources able to complete its $3.54 billion tie-up with Chinese-based Yanzhou Coal Mining Company.

The China Securities Regulatory Commission has given its approval, while a vote by Felix shareholders will take place on Tuesday. Yanzhou Coal is expected to list the new entity on the ASX by the end of 2012.

In the US, the Labor Department issued new data showing weekly jobless claims rose more than expected last week but the four-week average had significantly declined. Additionally, new figures also showed the trade deficit fell by 7.6%.

The Dow Jones Industrial Average was up 68.78 points or 0.67% to 10,405.83.