Incitec Pivot plans for fertiliser and explosives split, AGL warns over ‘false’ statements and Qantas acquires TripADeal

Incitec fertiliser IPL AGL Qantas QAN Nufarm NUF Elders ELD Viva Energy VEA ASX
Incitec Pivot plans to split off its mining explosives division from its fertiliser business by the middle of 2023.

Incitec Pivot (ASX: IPL) has revealed it is yet again going ahead with plans to separate its fertiliser and explosives businesses, which would both be demerged and listed on the ASX.

The company broke the news to shareholders on Monday, and will implement a structural separation of its Dyno Nobel and Incitec Pivot Fertilisers businesses.

Incitec Pivot chief executive Jeanne Johns says the decision followed careful consideration from the board and management to best “unlock value” for shareholders.

“This is due to the work we’ve done over the last four years to drive technology growth and differentiation, improve manufacturing reliability, progress our sustainability agenda and pursue low-capital, high-return growth,” she said.

The company reported record high half year profits for the group of $384 million across six months to 31 March, up from just $36 million during the same time last year. 

AGL

AGL (ASX: AGL) chairman Peter Botten has called on Mike Cannon-Brookes this week – urging him to stop voicing “false” and “misleading” statements on the company’s proposed demerger.

Mr Botten has threatened regulatory action against the Atlassian co-founder and AGL’s largest shareholder if he does not modify the statements he and his Grok Ventures campaign are making against the demerger.

Concerns have been raised due to a shareholder vote fast approaching, with the plan to split AGL into coal power generator Accel Energy and retail-focused AGL Australia – a move that needs 75% approval to go ahead.

“As the shareholder vote approaches, I know that we agree that there is no place for misleading, inaccurate, or unsubstantiated assertions,” he said.

Morningstar analyst Adrian Atkins has suggested Mr Cannon-Brookes is seeking to buy AGL on the cheap through destabilising the company by forcing the demerger vote to fail.

“My fear is that might be his ulterior motive. If he can sabotage the business, or at least threaten to, then he could get the board to accept a low-ball takeover offer,” he explained.

Qantas

Qantas (ASX: QAN) has bought a majority stake in Byron Bay travel website TripADeal this week, as Australia’s travel market begins to rebuild in the aftermath of COVID.

In a bid to add an additional $100 million to its earnings by financial year 2024, Qantas has purchased a 51% stake in the company as the airline’s loyalty segment expands with partnerships in the financial services, telecommunications and accommodation realms.

As part of the agreement, there are options for Qantas to buy the rest of the TripADeal business in four years from other shareholders.

Qantas chief executive officer Alan Joyce said the company has been looking to strike the right balance of organic and inorganic growth in the mid of recouping after the pandemic to become profitable again.

“In the last few weeks, you can see us making big announcements on Project Sunrise … we’ve also made a big investment in the Winton aircraft, the domestic and regional fleet, which is organic growth.”

Qantas Loyalty chief executive officer Olivia Wirth said the company chose the Byron-based company over an entity like Helloworld due its strategy to invest in a new company rather than expanding an existing shareholding.

Nufarm

Japan-based Sumitomo Chemical Company has sold down its 15.9% holding in Nufarm (ASX: NUF) this week, which is reportedly in response to Nufarm rejecting a $12 a share takeover offer from China’s Sinochem.

Sumitomo Chemical Company acquired a 20% stake back in April 2010, paying $14 a share.

The sale ends Sumitomo’s 12-year spell on Nufarm’s share register, with 60.3 million shares were put up for grabs.

Investment bank Citi was tasked with running a bookbuild to sell the interest, offering the shares at $5.38 to $5.61 each, which a 7.9% discount to the last close of $5.84.

Nufarm says it and Sumitomo will continue the mutually beneficial business alliance that started over a decade ago.

Continuing to “grow the commercial relationship and synergies in global agriculture markets” remains a priority for both parties.

Elders

Elders’ (ASX: ELD) has revealed this week farmers are seeking clarity from the new Labor-run Federal Government regarding to the path to net zero.

Recently sworn-in Prime Minister Anthony Albanese’s ascent to the top job comes with a promise to deliver more on climate change.

Elders’ chief executive officer Mark Allison said Australian farmers are hoping the new Labor government will deliver on its vow to address climate action, paving the way for the agribusiness sector to “get on” with the job of cutting emissions.

“I think a Federal Government with a clear mandate and a majority government that can do stuff and won’t get distracted is positive for Australia and positive for agriculture,” he said.

“We all have a view, an aspiration of net zero, of leaving our world a better place for future generations.”

Viva Energy

Viva Energy (ASX: VEA) has declared this week it has no complaints with the newly elected Albanese Labor Government’s climate action plans.

As one of Australia’s last oil refining companies, Viva said it’s comfortable with the new government’s plan to strengthen actions to reduce carbon emissions.

Labor has vowed to strengthen the existing “safeguard mechanism” to order big industrial polluters to sit down and negotiate with the Clean Energy Regulator relating to how emissions will be cut to achieve Labor’s aggregate target of 5 million tonnes of less carbon each year.

Some companies have seen the intended policies as offering an unfair disadvantage for some, but Viva chairman Robert Hill said the company is content with the policy.

“On the one hand, we see the Labor Party as wanting the refinery to continue, and they want to support the refinery. On the other hand, they want the refinery to play its part in a lower carbon future. And we have no quarrel with that,” he said.

“I’m pleased to say that we feel that we were a little ahead of that with the announcements we made last year, we’re actually achieving significant reductions ourselves in carbon emissions.”

Just last year, Viva said it would aim to reach net zero scope 1 and 2 emissions by 2050, as it announced it would lower emissions from its Geelong refinery by 10%t by 2030 through energy efficiency projects.

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