BOQ and Bendigo Bank merger rumours, Rio Tinto’s lost radioactive capsule found and Santos gets green light for Mount Tabor
The Bank of Queensland has stalled its search for a new chief executive officer with rumours it could merge with Bendigo Bank.
Bank of Queensland (ASX: BOQ) and Bendigo Bank (ASX: BEN) are reportedly in early merger discussions with the deal rumoured to be worth over $10 billion.
The exit of BOQ’s chief executive officer George Frazis in November has sparked rumours of a merger with Bendigo Bank and BOQ is said to have stalled its search for a new boss as it considers the possible merger.
The rumours come two years after BOQ acquired ME Bank for $1.3 billion. The two banks tried to merge in 2007 but the bid was rejected and Bendigo merged with Adelaide Bank instead.
Competitive pressures have increased in the mortgage market with ANZ’s (ASX: ANZ) recent acquisition of Suncorp Bank for $4.9 billion. Therefore, Bendigo and Adelaide Bank, and BOQ, need to gain scale to stay competitive in the market.
A potential challenge to the merger could be the difference in their community structure, with Bendigo and Adelaide Bank sharing profits with communities and BOQ having franchise branches.
Rio Tinto sparks radiation fears
A radioactive capsule owned by Rio Tinto (ASX: RIO) has been found after a 1,400km search of the Western Australian outback. The tiny capsule was part of an industrial gauge belonging to Rio’s Gudai-Darri mine site near Newman in the state’s Pilbara region.
The capsule fell off a truck while being transported from the mine to Perth and was lost in mid-January. The company realised the capsule was missing on 25 January when they inspected the gauge.
Authorities recommended people stay at least 5m away as exposure could cause radiation burns or sickness as it contained the isotope Caseium-137. The state also established a hazard management team and brought in specialised equipment to detect radiation levels.
Rio, with help from various agencies, located the capsule after a search of approximately 1,400km. The mining giant provided a statement apologising for the incident and committed to investigating it thoroughly to ensure it doesn’t happen again.
The incident is another headache for Rio Tinto following its destruction of two ancient rock shelters in 2020.
Aristocrat Leisure could pursue acquisitions
Aristocrat Leisure (ASX: ALL) could pursue acquisitions to boost its gaming device market share or digital business, according to Fitch Ratings.
Fitch Ratings recently affirmed the company’s credit rating at “BBB-” with a “stable” outlook, reflecting Aristocrat’s position in the global slot machine market and its commitment to low balance sheet leverage.
In 2021, Aristocrat attempted to acquire Playtech for $2.84 billion but the deal failed. To make up for this, the company could look for deals related to its digital business, which accounted for 46% of its revenue in 2022, up from 16% in 2017.
Another reason that supported Fitch Rating’s thesis is that Aristocrat’s balance sheet is sturdy enough to absorb bolt-on acquisitions and its liquidity and net leverage have improved since mid-2021. Fitch also expects the company to continue to pursue mergers and acquisitions using its strong excess cash balances or repurchase shares if deals do not materialise.
Santos’ Mount Tabor project receives final approval
The Bidjara people in South West Queensland will benefit from the Mount Tabor biodiversity offset project by Santos (ASX: STO).
Final government approvals received this month will conserve the 5,000-hectare environment in the region, in partnership with the local Traditional Owners. The partnership has been many years in the making and has been cemented with the final government approval.
Santos will offset activities from its Gladstone liquefied natural gas (GLNG) development in the Mount Tabor property area. The partnership with Santos is a relief for the Bidjara people and will secure the future of the land for future generations.
The partnership was entered into in 2021 through Goorathuntha Traditional Owners Limited and has full Commonwealth and Queensland government approval.
WiseTech Global acquires Envase
WiseTech Global (ASX: WTC) has acquired US logistics management software start-up Envase for $230 million. Envase Technologies provides transport management system software for intermodal trucking and landside logistics in North America.
The acquisition is with private investment firm Firmament and several other investors.
Envase has over 1,300 customers across North America and is expected to generate around $35 million in revenue for 2023 with an earnings before interest, tax, depreciation and amortisations (EBITDA) margin in the low to mid 20% range.
WiseTech will fund the transaction with 70% cash ($161 million) and 30% new WiseTech Global shares issued to the vendors ($69 million). The deal is expected to be finalised next month, with transaction costs of around $10 million to be funded from existing cash reserves.
WiseTech chief executive officer Richard White said the acquisition is strategically significant and strengthens the company’s position in one of its six key development priority areas.
Meanwhile, Envase chief executive officer Larry Cuddy Jr said the merger gives Envase the scale and resources to make a bigger impact.
The acquisition is expected to complete in February 2023.