Insurance Australia Group Ltd (ASX: IAG) announces partnership with Berkshire Hathaway
On Tuesday, IAG announced that it had formed a strategic partnership with Warren Buffett’s Berkshire Hathaway. As part of the arrangement, Berkshire will take a 3.7% stake in IAG for $500 million. Whilst Berkshire’s commitment is a ringing endorsement of one of Australia’s largest insurers, it is unclear whether IAG or Berkshire got the better side of the deal.
Woolworths Limited (ASX: WOW) CEO retires and reports earnings downgrade
On Wednesday, Woolworths announced that CEO Grant O’Brien, who was appointed in October 2011, is stepping down. Mr O’Brien acknowledged that the recent performance of the company has been below expectations. Woolworths stated that net profit after tax is likely to be $2.15 billion this year down from $2.45 billion in 2014. Does this represent a turning point for the company or are its problems more deep-rooted?
Troubled retailer Metcash, announced that it was selling its automotive business to Burson Group on Monday for $275 million. The purchase price multiple of 9.9x 2015 earnings before interest and tax suggests that Burson Group may have struck a good deal for its shareholders. The purchase is being funded primarily using equity, with the institutional component successfully completed on Thursday.
On Tuesday, Amcom shareholders voted in favour of the proposed acquisition by Vocus, with 77.2% voting for and just 22.8% voting against. Excluding votes cast by rival TPG Telecom Limited, which has an 18.6% equity interest in Amcom, the vote was almost unanimous. Amcom shareholders will now receive 0.4614 Vocus shares for each Amcom share currently held.
2 stories from the smaller end of the market
Netcomm Wireless Ltd (ASX: NTC) upgrades earnings guidance
Leading developer of broadband hardware, Netcomm Wireless, announced on Tuesday that it expects earnings before interest, tax, depreciation and amortisation to be $7 million this year up from its previous guidance of $5.2 million. The company looks set to benefit from the growing number of things designed to connect to the internet. At current prices, the stock has a market capitalisation of just under $100 million.
Empired Ltd (ASX: EPD) announces two new significant contracts
IT services provider, Empired, announced a new $15 million contract on Tuesday, shortly followed by a $10 million contract award on Thursday. The company has won a total of five major contracts since the start of March and looks to be moving in the right direction. Billionaire investor Alex Waislitz seems to think so after his company upped its stake in Empired to 5.6% on Tuesday.