NAB still in talks with AXA, Wall Street reform bill passed: Economy Roundup

National Australia Bank remains in talks with AXA Asia Pacific Holdings, along with French parent group SA, in order to extend a $13.3 billion agreement to meet regulatory concerns.

Both companies have said the preliminary agreement which expired yesterday would remain in place “in the meantime” in order for both companies to continue discussions.

NAB and AXA have previously extended the original agreement by six weeks. The ACCC originally blocked the deal in April, preferring a previous lower bid by AMP.

Meanwhile, sources have told Reuters two private equity groups are expected to lodge bids for hospital owner Healthscope, with a deal worth about $1.8 billion.

The two companies are named as Kohlberg Kravis Roberts & Co., and a consortium composed of TPG and Carlyle.

TPG and Carlyle will go ahead with a bid, the report suggests, even though Blackstone Group pulled out of the consortium yesterday. “TPG and Carlyle are working towards putting a bid in at [the end of the day],” the source said.

In the mining sector, Oz Minerals has recorded a drop in copper output for the June quarter, with production totalling 28,236 tonnes for the three months to 30 June – down by 11.5% from the 31,090 tonnes recorded during the March quarter.

Gold production came to 49,249 ounces, more than double the output from the previous year.

As reported by The Age, Air New Zealand is considering buying a stake in airline Virgin Blue. The publication has reported the company is considering taking a 15% stake in Virgin.

However, ANZ said in a statement it had not bought any shares so far and any purchase would need to be approved by the Australian Foreign Investment Board and the New Zealand Government.

“Air New Zealand is conscious that airline alliances such as the one planned with Virgin Blue frequently include an equity aspect, but the proposed alliance does not do so,” the company said.

“The necessary regulatory approvals for the trans-Tasman alliance are still in process and Air New Zealand has had no indication of the outcome of this decision. A final decision on the alliance is expected by the end of the year.”

Sharemarket opens flat after similar Wall Street results.

The Australian sharemarket has opened flat today, following similar results from Wall Street where BP and Goldman Sachs

The Australian sharemarket was down by 12 points or 0.29% to 4429.8 at 12.15 AEST, while the Australian dollar was up to US88c.

Commonwealth Bank shares have dropped 0.1% to $51.28, while NAB shares have also lost 0.1% to $24.48. Westpac lost 0.6% to $22.59, while ANZ fell 0.1% to $22.58.

Elders has named John Ballard as chairman-designate, following Stephen Gerlach’s resignation announcement in December. He has joined as director, and will take on the role after an induction period.

“Elders holds a deservedly iconic position in the sector,” Ballard said in a statement. “While the renewal program that the company has been working on over the last two years has faced some clear challenges, I am firmly of the view that Elders will continue to play an important and successful role in the development of Australia’s agricultural industry.”

Department store giant David Jones has extended the lease on its Perth Karrinyup store for 20 years, with the new agreement “on attractive commercial terms in line with the more favourable David Jones leases”, the company said in a statement.

“I am pleased to report that since 2008 we have locked in a proposed new store in Whitford, an option for a new store at the proposed Westfield Innaloo redevelopment, and an expanded Karrinyup store,” chief executive Paul Zahra said in a statement.

“This has effectively enabled us to lock-in a dominant position in the high value, high growth northern Perth region.”

Wall Street shares negate losses to end flat

Investment giant Goldman Sachs has agreed to pay $US550 million in order to settle civil fraud charges over how the company marketed a subprime mortgage product leading up to the financial crisis.

The US Securities and Exchange Commission voted to settle the fraud charges, with only two members voting against the motion. The company’s share rose 4.2% after the market close.

Also, BP shares rose nearly 10% after the company announced it had placed a preliminary cap on the oil leak in the Gulf of Mexico. It will now conduct a series of tests to determine if the cap is permanent, and whether it will hold for an extended period of time.

But investors were also rattled by the senate’s vote to approve a massive Wall Street reform package. However, president Barack Obama moved to calm the markets saying that “Unless your business model depends on cutting corners or bilking your customers, you have nothing to fear from this reform”. The bill will be signed into law next week.

The Dow Jones Industrial Average dropped seven points or 0.07% to 10,359.31.