The Australian share market or S&P/ASX 200 (INDEXASX: XJO)(ASX: XJO) index opened higher Monday morning with plumbing store operator Reece Limited (ASX: REH) in the news.
Here’s the key headline data:
Australian Dollar ($A) (AUDUSD): 75 US cents
Dow Jones (DJI): up 1.4%
Oil (WTI): $US69.80 per barrel
Gold: $US1,315 per ounce
On Friday, London-listed shares of BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) finished up 2.8% and up 1.9%, respectively, according to Yahoo! Finance.
Australian Investing News
Making news in Australia, Reece Limited (ASX: REH) announced that it will sell $560 million shares to help fund the $1.9 billion takeover of US plumbing business MORSCO Inc. MORSCO is a distributor of plumbing, waterworks and HVAC products in 16 US states.
The deal will be funded by a combination of debt and selling new shares, $300 million of which will be purchased by the Wilson family, Reece’s most significant investor. Reece expects the deal will result in improved earnings per share once MORSCO is integrated but have assumed no synergies from bringing the two companies together.
“We’re excited to be entering a long-term partnership with MORSCO to invest in the growth of their business in the US market,” Reece CEO Peter Wilson said. “It’s a market that’s forecast to grow at twice the rate of the Australian market and it is currently about eight times the size.”
Also making news in Australia and on the ASX, Blue Sky Alternative Investments Ltd (ASX: BLA), the fund manager which found itself the target of a widely followed short-selling firm, has withdrawn its earnings guidance for its 2018 and 2019 financial years.
In addition, Blue Sky plans to restructure its business model and management team, including the resignation of its Chairman and each of its directors excluding the managing director.
“The Board is examining proposed changes to the Blue Sky business model and management structure, to prioritise Blue Sky’s areas of competitive strength and to better align Blue Sky’s fixed cost base with recurring management fee revenue,”
interim managing director, Kim Morison said.
Recently, Glaucus Research Group accused Blue Sky of failing to report its investment performance, size and fees with transparency. Following today’s proposed changes, Morison said: “These initiatives are expected to deliver a better performing, more transparent and accountable business with recurring annual management fees exceeding fixed operating expenses from FY19.”
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