Foster’s deal approved by court, David Jones tips tough Christmas: Midday Roundup

Beverage giant Foster’s has seen its proposal to be taken over by South African brewing giant SABMiller approved by the Victorian Supreme Court.

The confirmation comes after shareholders voted yesterday in favour of the move, which will see yet another local brewing company handed over to foreign ownership.

Justice Anne Ferguson approved the move this morning, a takeover worth $10.48 billion.

Chairman David Crawford has said pressure from the Australian dollar and competition from supermarket giants Coles and Woolworths is partly behind the move to come under a foreign ownership structure.

Shares flat after similar lead from US

The Australian sharemarket has opened flat this morning after a similar lead from the United States, following a rally worth several hundred points after central banks confirmed a push to make available funds for commercial banks.

The benchmark S&P/ASX200 index was up 14 points or 0.4% to 4243.3 at 12.00 AEST, while the Australian dollar remained steady at $US1.02c.

AMP shares rose 0.7% to $4.33, while Commonwealth Bank shares rose 0.68% to $48.93. NAB lost 0.17% to $24.13 as Westpac rose 0.76% to $21.29.

In the United States, the Dow Jones Industrial Average fell 0.2% or 24 points to 12,020.

S&P cuts credit ratings for major banks

Standard & Poor’s has downgraded credit ratings for Australia’s major banks due to a key shift in how it assesses criteria.

ANZ, Commonwealth Bank, NAB and Westpac have been cut to AA-, which is the fourth highest rating on the scale.

S&P explains that its new methodology puts more emphasis on the banking system of the country where each bank is located.

Pacific Equity raises Spotless bid

Pacific Equity Partners has raised its bid for cleaning services group Spotless to $711 million after its first bid was rejected.

Reports indicate Spotless shareholders have been speaking with the company about accepting the bid.

In a statement, Spotless told the market that it “will continue to engage with both PEP and its shareholders”, but noted that it may or may not result in an offer being accepted.

David Jones facing tough Christmas

David Jones chief Paul Zahra has told shareholders at the company’s annual general meeting the department store is facing a tough Christmas, but that the company’s offerings are top-notch.

“While we are building future profitable revenue streams for our company, we are also highly focused on the upcoming Christmas quarter and meeting all the challenges that the macro environment will throw at us,” he said.

“Despite the short-term outlook of challenging retail conditions, as with all economic cycles, the cycle will turn.”

Last week the company reconfirmed its profit forecast of a decline between 15-20% for the first half. However, Zahra said yesterday he is focused on the company’s long-term success.

“I do not underestimate the size of the challenge or the difficulties we are facing, however, I give you my commitment to deal with it with your best interests at heart.”

Government prepared to lose surplus

The Australian Financial Review has reported the Government may be willing to sacrifice its surplus if the European crisis becomes worse than expected.

“We will always look to what are the right economic and fiscal settings to support growth and jobs,” finance minister Penny Wong said on Thursday during a debate.

Wong said the Government had “a degree of policy flexibility both on the monetary and fiscal fronts”.