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  • Speed MnA dating: Wesfarmers and IAG | Business Spectator
    Financial Services Food and Beverages Gaming and Racing Health and Pharmaceuticals HR Industrial relations Information Technology Infrastructure Insurance Manufacturing Media and Digital Resources and Energy Professional Services Property Retail Small Business SME Telecommunications The Ashes Tourism Transport and Logistics Video KGB TV China Spectator CEO Hub Leadership Lab Management Insights Young Leaders Knowledge Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu Speed MnA dating Wesfarmers and IAG Brett Cole 16 Dec 2013 5 37 PM DataRoom Mergers Acquisitions Industries Insurance The 1 84 billion sale of Wesfarmers insurance unit to Insurance Australia Group was done in four weeks You must be logged in to read this article Not a member yet Register today Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like Register now Already a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password About eight weeks ago Wesfarmers managing director Richard Goyder called the company s long time adviser Neville Spry a 24 year veteran of Gresham Advisory Partners Ltd to ask him how to deal with inquiries from a number of companies wanting to buy the Perth based conglomerate s insurance business We were approached by a number of parties this year Goyder told reporters on a conference call declining to name them apart from the successful purchaser Insurance Australia Group Ltd IAG Spry who advised Wesfarmers on its 2007 21 billion acquisition of supermarket retailers Coles recommended an auction for the last big Australian and New Zealand insurance underwriting business outside local and foreign financial groups The auction would eventually result in a 1 84 billion deal that involved not only Spry but also Gresham s sometime ally sometime competitor Goldman Sachs Group Inc and law firm Herbert Smith Freenhills These firms Goyder told DataRoom were hired simply because they were the right advisers to go with Wesfarmers has a 50 per cent stake in Gresham Partners Group the holding company of Gresham Advisory Partners Substantial negotiations around the transaction occurred in November and December as Wesfarmers and its advisers were locked in an intense negotiating period with IAG and its advisers the investment bank UBS AG and law firm Minter Ellison It was three to four weeks from go to woe on the deal says one person involved in the transaction Such a time frame focused minds on the task at hand and helped drive the deal to culmination A lot of transactions take time and the protagonists often talk themselves out of deals says the person UBS and Minter Ellison had not only M A teams on the transaction but also equity capital markets specialists to raise 1 2 billion in a fully underwritten share sale to help pay for the acquisition IAG s fundraising will also include a non underwritten 200 million share purchase plan and a 300 million

    Original URL path: http://www.businessspectator.com.au/news/2013/12/16/mergers-acquisitions/speed-mna-dating-wesfarmers-and-iag (2014-01-13)
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  • IAG buys Wesfarmers' insurance arm | Business Spectator
    a member yet Register today Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like Register now Already a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password By a staff reporter Wesfarmers Ltd has agreed to sell its Australian and New Zealand underwriting operations of its insurance division to Insurance Australia Group Ltd for 1 845 billion IAG entered a trading halt before the announcement while Wesfarmers shares rose 0 69 per cent to 41 59 at 1100 AEDT against a slight benchmark index fall of 0 03 per cent In a statement to the Australian Securities Exchange Wesfarmers said the deal does not include Wesfarmers broking operations in Australia New Zealand and the United Kingdom or its premium funding businesses in Australia and New Zealand The deal includes Wesfarmer s underwriting companies trading under the Lumley Insurance and WFI brands as well as a 10 year distribution agreement with Coles Insurance Wesfarmers said it expects to record a pre tax profit of 700 million to 750 million on successful completion of the transaction which it expects to include in the financial results for the second half of fiscal 2014 IAG said the acquisition is expected to deliver modest earnings per share accretion in its first full year of ownership and at least five per cent accretion in the second year excluding integration costs and amortisation of identified intangibles The purchase will be funded from a combination of 300 million of Tier 2 subordinated debt planned for issue in early calendar 2014 a fully underwritten 1 2 billion institutional placement at 5 47 per share a four per cent discount to IAG s closing price on December 13 a non underwritten share purchase plan capped at 200 million and internal funds IAG said IAG expects the integration of Wesfarmers underwriting businesses to generate net synergies of approximately 140 million per annum pre tax with a significant proportion derived from reinsurance The integration process is expected to be substantially complete within two years with pre tax integration costs of 120 million set to be recognised IAG said IAG said the group s regulatory capital position is expected to remain within its target benchmarks after completion of the acquisition IAG managing director Mike Wilkins said the deal increases the group s gross written premium base by around 18 per cent based on fiscal 2013 results Wesfarmers underwriting operations are highly complementary to our existing intermediated businesses in Australia and New Zealand and will be integrated with our CGU and NZI operations Mr Wilkins said IAG said the addition of WFI and Lumley provides CGU with solid positions in attractive segments such as commercial motor IAG reaffirmed fiscal 2014 guidance of gross written premium growth of between five per cent and seven per cent and a reported insurance margin in the range

    Original URL path: http://www.businessspectator.com.au/news/2013/12/16/insurance/iag-buys-wesfarmers-insurance-arm (2014-01-13)
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  • Cover-More IPO raises $521m | Business Spectator
    Retail Small Business SME Telecommunications The Ashes Tourism Transport and Logistics Video KGB TV China Spectator CEO Hub Leadership Lab Management Insights Young Leaders Knowledge Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu Cover More IPO raises 521m Brett Cole 11 Dec 2013 3 02 PM DataRoom Equity Capital Markets Industries Insurance Markets ASX Macquarie and UBS the two leading underwriters of IPOs in Australia placed most of Cover More s shares with key investors two weeks ago You must be logged in to read this article Not a member yet Register today Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like Register now Already a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password Macquarie Group Ltd and UBS AG have successfully raised 521 2 million in an initial public offering for insurer Cover More Group Ltd the third biggest Australian IPO of the year The two investment banks closed a book build at 1400 AEST and are in the midst of allocating to investors a small portion of the 260 6 million of the travel insurer and medical assistance company s shares on offer at 2 each The shares are due to start trading on December 23 Most of the shares in the Cover More IPO had already been sold to fund managers before the IPO s prospectus was issued earlier this month This so called cornerstone process enabled the IPO to be fully underwritten while allowing Macquarie and UBS able to claw back some shares and sell them to individual investors and select institutional clients Sometimes cooperating on IPOs while remaining fierce competitors Macquarie and UBS have been battling all year to be the number one underwriter of IPOs in the Australian market Macquarie is currently ranked first and UBS second in the Bloomberg Australia IPO league table The homegrown investment bank has a clear lead over its Swiss rival for the number one spot having done seven IPOs worth 2 41 billion compared with five UBS deals worth 1 6 billion according to Bloomberg data There have been 47 IPOs priced in Australia so far this year with 46 of them currently trading Macquarie and UBS have had their IPO triumphs and problems UBS was a lead manager along with Citigroup Inc of the IPO of credit bureau Veda Group Ltd whose shares are up 43 per cent since their listing last week But UBS was the global coordinator and joint lead manager with Macquarie on Nine Entertainment IPO whose shares have fallen 7 3 per cent since their ASX debut Shares in electronics retailer Dick Smith Holdings Ltd whose IPO was seen as a rushed deal by some bankers are up 1 4 per cent since the December listing Macquarie was joint lead manager of the IPO with Goldman Sachs Group

    Original URL path: http://www.businessspectator.com.au/news/2013/12/11/equity-capital-markets/cover-more-ipo-raises-521m (2014-01-13)
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  • QBE credit rating cut | Business Spectator
    politicians feel the pressure from the continent s ongoing economic crisis The nuclear renaissance is stone cold dead There is no nuclear recovery with the industry last year flailing to stay above water in key markets and its share of global electricity continuing a seemingly inexorable decline Industries Advertising and Marketing Agribusiness Automotive Aviation Construction and Engineering Education Family Business Financial Services Food and Beverages Gaming and Racing Health and Pharmaceuticals HR Industrial relations Information Technology Infrastructure Insurance Manufacturing Media and Digital Resources and Energy Professional Services Property Retail Small Business SME Telecommunications The Ashes Tourism Transport and Logistics Video KGB TV China Spectator CEO Hub Leadership Lab Management Insights Young Leaders Knowledge Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu QBE credit rating cut 11 Dec 2013 12 05 AM Industries Insurance Markets ASX Moody s downgrade comes as insurer s share price keeps falling on loss forecast You must be logged in to read this article Not a member yet Register today Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like Register now Already a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password By a staff reporter with AAP Insurance giant QBE Insurance Group Ltd has had its credit rating downgraded due to its forecast of a 250 million loss for the 2013 calendar year Moody s downgraded QBE s issuer and senior unsecured debt ratings to Baa2 from Baa1 The downgrade reflects the company s weakened profitability internal generation of capital and measures to cover its debt servicing Moody s said QBE on Monday announced a series of writedowns and provisions on the various north American businesses it has acquired since 2006 which will lead to the loss for the year Shares in QBE plunged further after yesterday s profit downgrade At the 1615 AEDT official market close QBE shares had sunk 9 83 per cent to 10 82 against a benchmark index fall of 0 02 per cent The fall follows yesterday s 22 33 per cent share price drop after the insurer announced the downgrade Almost 5 7 billion has been wiped from QBE s market value since it announced the writedowns QBE expects to swing to a full year net loss of US250 million A274 5 million compared to a net profit of US761 million in the previous year The insurer announced a goodwill impairment charge of around US600 million A658 8 million primarily from its North American business IG market analyst Chris Weston said the shake out of QBE longs continued on Tuesday Traders continue to ask Do I short at these levels do I go long now or wait until 10 he said This 10 level is huge support on the daily chart but it s important to realise confidence in the stock from a bottom up

    Original URL path: http://www.businessspectator.com.au/news/2013/12/10/insurance/qbe-credit-rating-cut (2014-01-13)
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  • Navigating the downgrade deluge | Business Spectator
    contenteditable false wf deltas 7 wf field field wysiwyg media wf formatter aibm ui media output wf settings style full width wf cache 1386653014 wf entity id 713046 wf entity type node CCL wysiwyg field contenteditable false wf deltas 4 wf field field wysiwyg media wf formatter aibm ui media output wf settings style full width wf cache 1386653014 wf entity id 713046 wf entity type node QBE wysiwyg field contenteditable false wf deltas 5 wf field field wysiwyg media wf formatter aibm ui media output wf settings style full width wf cache 1386653014 wf entity id 713046 wf entity type node WOR wysiwyg field contenteditable false wf deltas 6 wf field field wysiwyg media wf formatter aibm ui media output wf settings style full width wf cache 1386653014 wf entity id 713046 wf entity type node For the future investor focus should firstly on how the earning revision came about Management guidance on plans moving forward and overall strategy should also be put in the spotlight Having said this revising earnings lower doesn t always necessarily signal a problem company The reasons for the downgrade can indicate the company has a viable chance of getting the share price back to where it was pre revision in a reasonable time For Worley Parsons and QBE that time may be sometime away when we note the shocking size of their falls exceeding 20 per cent in one day Since the earliest profit warning was announced for each of the above four companies only lower trading ground has been found Something drastic will need to change to turn the fortunes of these companies around Repeat offenders when it comes to earning revisions should flag investor attention as companies create a pattern Not surprisingly the relationship between investors and the boards responsible for overall management and strategy are set to be on shaky ground for Worley Parsons Qantas and QBE For Coca Cola the appointment of Alison Watkins to the post of chief executive from March next year could be enough to restore investor confidence These tests of faith in management and strategy could see further sell side pressure emerge as investors consider breaking up with companies with a history of downgrades Print this page Navigating the downgrade deluge Kirstie Spicer 10 Dec 2013 11 08 AM 3 Industries Aviation Insurance Manufacturing Markets ASX More from Kirstie Spicer 20 Dec The year in stocks 20 Dec Market Insights Holding firm 20 Dec The year in charts 19 Dec Market Insights Celebrating certainty 19 Dec Markets take tapering in their stride for now Related articles 13 Jan Aust stocks open little changed 13 Jan Scoreboard Dollar bounce 13 Jan ASX warns on market outsourcing 13 Jan Aust dollar lifts in early trade 13 Jan NZ dollar to pass Aust dollar HSBC More from Business Spectator Technology Adapt or die Commercial The Future of Energy Family Business Alan Kohler s Family Business China China Spectator Log in to post comments Comments Replace the QAN chart

    Original URL path: http://www.businessspectator.com.au/article/2013/12/10/markets/navigating-downgrade-deluge (2014-01-13)
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  • QBE dives on profit downgrade | Business Spectator
    chairman Belinda Hutchinson from March 2014 In a conference call chief executive officer John Neal said QBE expects to hire a new chief financial officer externally and is interviewing from a short list after CFO Neil Drabsch delayed his retirement after his named successor also decided to retire Adjusting for the after tax cost of amortisation and write down of identifiable intangibles and goodwill QBE said it expects its 2013 cash net profit after tax NPAT to be around US850 million compared with US1 04 billion in 2012 The group also downwardly revised its full year guidance to a combined operating ratio of 97 to 98 per cent and an insurance profit margin of around 6 per cent on net earned premium of US15 2 billion At its half year results QBE said it was expecting a combined operating ratio of 92 per cent and an insurance profit margin of 11 per cent Late last week the QBE board completed operational and strategic review of the North American underwriting businesses The extensive investigation by internal and external actuaries of the North American Program portfolio will result in an approximate US300 million increase in prior accident year claims provisions particularly in relation to long tail classes of business such as workers compensation general liability and construction defects risks QBE said QBE also noted its North American crop business had become less profitable throughout the year with initial crop harvest yield data indicating a combined operating ratio COR of around 99 per cent for the business signifcantly weaker than the expected long term average of around 88 per cent The record crop yield projected by the US Federal Government has not materialised increasing QBE s exposure to revenue claims as a result of the collapse in crop prices particularly for corn after early season preventative planting claims eroded the Federal Crop Insurance Corporation reinsurance deductible the group said QBE s specialist lender placed business QBE FPS will also report a loss in 2013 as a result of a very material and rapid contraction of revenue coupled with one off regulatory and legal costs and adverse claims experience Becker to succeed Hutchinson Ms Hutchinson had previously advised the QBE board that she would not seek re election in 2015 but acquiesced to the board s request to remain as chairman until after the 2013 full year results were released Non executive director Mr Becker has been appointed deputy chairman and will then succeed Ms Hutchinson as chairman in March Mr Becker was most recently chief executive officer of Alterra Capital Holdings and was appointed to the QBE board in August Duncan Boyle will succeed Mr Becker as deputy chairman upon his taking of the chairman position Print this page Related articles 10 Jan Value Investor QBE is still at a premium 10 Jan China s Fosun buys Portuguese insurer in privatisation 06 Jan Why a public asset sell off is on the money 02 Jan IAG boosts catastrophe cover 20 Dec Wesfarmers value

    Original URL path: http://www.businessspectator.com.au/news/2013/12/9/insurance/qbe-dives-profit-downgrade (2014-01-13)
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  • An American anchor drags on QBE’s renewal | Business Spectator
    password When John Neal announced a steep decline in interim earnings and a halving of QBE Insurance Group s dividend after disclosing continuing problems within its US operations the market remained sceptical that it had got to the bottom of its US issues The market was right Today Neal foreshadowed a full year loss of about 250 million centred on a further blowout in prior year claims an implosion in the revenue of the US lender placed business and more fallout from the collapse of crop prices in the US The new guidance has sent QBE s shares plummeting again they are now down about 30 per cent compared to before the group s interim result was disclosed The downgrade follows a board appraisal of findings from a strategic and operational review undertaken by the new North American executive team Neal put in place after becoming QBE s chief executive in mid 2012 The raft of writedowns and increased provisioning relating to the outcome of the review which included a charge for impaired assets of 150 million and a write off of 330 million of intangible assets with the specialist lender placed business were described by Neal as emphatically dealing with the North American issues that have been detrimental to confidence and underwriting performance over recent reporting periods As painful as these decisions are we are confident that our business in North America will trade profitably in 2014 Neal said Those comments won t please those in the market urging QBE to exit the more troublesome segments of its North American operations Neal succeeded the long serving Frank O Halloran as QBE s chief executive only to be hit by a succession of issues some of them like a spate of natural disasters beyond the group s control but the core of them relating to some of the myriad of acquisitions O Halloran had made Those issues have coincided with an ambitious plan for structural change within QBE which had developed as a federation of loosely related businesses to create a simpler and more centrally directed and significantly lower cost operating platform There have also been wholesale changes to the senior leadership team under Neal QBE s cash profit this year is forecast to be around US850 million 933 3 million compared with US1 04 billion in 2012 with an insurance profit margin that at 6 per cent is almost half what Neal had targeted in the group s mid year guidance QBE is targeting an insurance profit margin of 10 per cent in 2014 but after several years where the group has badly undershot its forecasts the market will want to see it actually meet or exceed expectations before credibility can be restored The group s chairman Belinda Hutchinson announced her planned retirement in March next year after the full year results are announced Hutchinson previously told the board she wouldn t seek re election in 2015 indicating she is departing a year earlier than planned While Hutchinson has

    Original URL path: http://www.businessspectator.com.au/article/2013/12/9/insurance/american-anchor-drags-qbes-renewal (2014-01-13)
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  • QBE shares enter trading halt | Business Spectator
    do enough to sway attention from its rivals Google v Facebook Who knows wins The unparalleled Google Analytics service means Google knows more about internet users than anyone else And runner up Facebook must go further to mine precious user insights if it wants to compete Climate Carbon markets Energy markets Renewable energy Resources Solar energy Wind power CleanTech Science Environment Green Deals Policy Politics Smart Energy Latest stories Is the EU about to abdicate climate leadership The rift over energy and climate policy is widening in Brussels as politicians feel the pressure from the continent s ongoing economic crisis The nuclear renaissance is stone cold dead There is no nuclear recovery with the industry last year flailing to stay above water in key markets and its share of global electricity continuing a seemingly inexorable decline Industries Advertising and Marketing Agribusiness Automotive Aviation Construction and Engineering Education Family Business Financial Services Food and Beverages Gaming and Racing Health and Pharmaceuticals HR Industrial relations Information Technology Infrastructure Insurance Manufacturing Media and Digital Resources and Energy Professional Services Property Retail Small Business SME Telecommunications The Ashes Tourism Transport and Logistics Video KGB TV China Spectator CEO Hub Leadership Lab Management Insights Young Leaders Knowledge Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu QBE shares enter trading halt 6 Dec 2013 10 13 AM 1 Industries Financial Services Insurance Insurer finalises review of North American operations effect on FY result You must be logged in to read this article Not a member yet Register today Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like Register now Already a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password By a staff reporter QBE Insurance Group Ltd shares have been placed in trading halt at the company s request pending the release of an announcement as it finalises a review of its North American operations impact on its expected full year results In a statement to the Australian Securities Exchange QBE said it asked for the halt to allow QBE time to finalise its analysis of information and review by the board predominantly in relation to its North American operations and the impact on QBE s forecast financial result for the year ending December 31 2013 QBE expects to issue a market release and hold an open investor conference call on December 9 The insurer said the shares will remain in a halt until the start of trade on December 10 or when the announcement is released to the market Print this page Related articles 10 Jan Value Investor QBE is still at a premium 10 Jan China s Fosun buys Portuguese insurer in privatisation 06 Jan Why a public asset sell off is on the money 02 Jan IAG boosts catastrophe cover 20 Dec Wesfarmers value is off Target More

    Original URL path: http://www.businessspectator.com.au/news/2013/12/6/insurance/qbe-shares-enter-trading-halt (2014-01-13)
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