10 Mar M&A: WILL THE BOOM CONTINUE?; THE NEXT ESG BATTLEGROUND.
Welcome to this week’s business and media intelligence update.
M&A: WILL THE BOOM CONTINUE?
It’s been that kind of week for Australian mergers and acquisitions.
As you will recall, back on February 20, Canadian funds giant Brookfield and Australia’s own tech billionaire Mike Cannon-Brookes surprised the market (and quite a few politicians in Canberra), by announcing an unexpected bid of $7.50 per share for energy giant AGL, which is itself, in the middle of a demerger strategy. The Brookfield-Cannon-Brookes plan? To accelerate AGL’s plans to exit coal by 2050.
But after several days of headlines and much commentary across the media, the bidders announced on Sunday that well, they were walking away – at least for now. Despite a sweetened offer, which valued AGL at more than $8 billion, the AGL board said thanks but no, thanks. Instead, they will push ahead with the demerger.
So, what does this say about the M&A environment?
One view is that last year’s deals boom is set to continue in 2022, and here is why: major Australian listed companies are currently holding on to large amounts of cash. The recent reporting season revealed that total cash holdings by our top listed companies amounted to about $246 billion as at December 30 – a spectacular 60 per cent increase.
Not surprisingly, boards are coming under growing pressure from shareholders to either invest those funds into their business or hand the cash back in the form of dividends or buybacks.
THE NEXT ESG BATTLEGROUND
Workplace culture issues may be the next big problem corporations have to worry about, according to the Australian Council of Superannuation Investors (ACSI).
The Council’s chief executive Louise Davidson told a business conference this week that companies that ignored or mishandled issues such as sexual harassment, sexism and racism could face “material financial impacts”.
Ms Davidson said that while companies were beginning to listen to the environmental issues raised by shareholders, the next ESG battleground is likely to be culture.
COMPANIES COUGH UP THE CROISSANTS
After two years of remote working, organisations are working hard at enticing office workers back, offering everything from free coffees and breaky to welcome drinks and even complimentary back massages.
But it’s going to take a lot of free croissants to keep them coming in, according to The Australian Financial Review.
It seems most employees have got a little too used to sleep-ins, morning walks and takeaway coffees from the corner cafe and are dreading the expense and discomfort of the daily office commute.
All of which prompted the newly-sworn in Chief Justice of NSW, Andrew Bell, to warn that staying at home could hamper professional growth and development. According to His Honour, an essential part of being a good lawyer is understanding people, how others react – and performing under pressure.
And that’s difficult to learn from staring at a screen, in the comfort of your bedroom.
Go figure.
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