Arrow Energy gets $3 billion takeover offer from Shell, Shares up: Economy Roundup

Energy group Arrow Energy has received a takeover offer of about $3.3 billion from the Anglo-Dutch oil group Royal Dutch Shell.

According to a statement to the Australian Securities Exchange, the company has said it has received a non-binding indicative and conditional proposal from the company, which proposes shareholders would receive $4.45 cash per share.

“At this stage the Arrow Board recommends shareholders take no action in relation to their Arrow shares,” the company said, adding it has appointed Citi and UBS as financial advisers for the proposal.

Arrow shares have gained over 40% as a result of the proposal to about $5 early this morning.

Meanwhile, JB Hi-Fi chief executive Richard Uechtritz has sold down his stake in the company, with 500,000 shares gone during last week for nearly $10 million.

According to a filing with the Australian Securities Exchange, Uechtritz sold his stake for $19.74 per security, equating to a gain of $9.87 million. It comes as he is preparing to leave his position in either July or August with chief operating officer Terry Smart to take over the reins.

The Australian sharemarket has opened higher today due to good results from overseas and commodities markets late last week, along with positive economic data from the US.

The benchmark S&P/ASX200 index was up 41 points or 0.87% to 4808.5 at 12.00 AEST, with the Australian dollar also rising to US90c after positive employment data was released.

AMP shares gained 2.2% to $6.10, with Commonwealth Bank shares gaining 0.2% to $26.54. NAB also rose 0.2% to $26.54, as Westpac rose 0.6% to $26.91.

BHP reaches terms for 2010 sales

In the mining industry, giant BHP Billiton has said it has reached terms for many of its coal sales for 2010, including moving to “shorter term market based pricing”.

“BHP Billiton today announced that it had reached terms for a significant portion of its hard coal volumes for 2010, based on a structural change to shorter term market based pricing for the contract period,” the company said in a statement, with the agreement affecting customers in Europe, China, India and Japan.

“These settlements reflect the company’s commitment to achieving market clearing prices over time across all its bulk commodities,” BHP said.

Iron ore manufacturer Atlas Iron has requested a trading halt ahead of an upcoming announcement regarding a major transaction.

The company’s shares will remain suspended until March 10, or until the announcement is made to the public. It is understood that a group of companies including Saudi-based ABS Consulting and Boulder Steel have made a $230 million bid for a share of Atlas’ $3 billion Ridley project.

The Federal Government has promised its overhaul of the health system will not lead to an increase in GST, but it has not out ruled any new taxes – leading to significant outcry from the Opposition.

Opposition leader Tony Abbott has said there should be concerns over whether the Government intends to increase taxes to pay for reform.

“Every Australian should be very concerned that Prime Minister Kevin Rudd and his ministers can’t rule out tax increases to pay for their experimentation with public hospitals,” he told AAP.

But health minister Nicola Roxon has told the Ten Network that “We have made absolutely clear the GST will not rise – everybody from the Prime Minister down is giving that guarantee”.

NAB suspends discussions with PIS

NAB has temporarily suspended discussions with Professional Investment Services, according to reports in The Age. The publication has reported that NAB is concerned the Australian Competition and Consumer Commission might block its takeover offer for AXA and that talks with PIS are complicating matters.

Meanwhile, incoming Virgin Blue chief executive John Borghetti has said business travel is increasing and that this activity will continue as the economy recovers.

“Certainly in my 36 years of experience I’ve seen situations like this happening before where the corporate market has dried up, for want of a better term, because of economic situations and all you’ve got to do is look back to the Asian crisis and ask some of the Asian carriers how much their business traffic died during that period but then how quickly it came back,” he told ABC’s Inside Business.

“And I think that what you’re seeing now is certainly a trend, or have seen in the last 12 months, a trend in reduction in corporate spend but that will turn around and we’re starting to see signs of that already,” he said.

In the US, investors are awaiting official retail sales data but good activity is likely following reports last week that employers had cut fewer jobs than expected. Business inventory data is also expected on Friday.