The silly season appears to have come a bit early in Australian political and business circles. Surely that’s the only answer for the outbreak of angst that we’re seeing at present.
Yesterday we saw Julia Gillard and her team brilliantly side-swipe Tony Abbott in the wake of the resignation of Speaker of the Lower House, Harry Jenkins.
Whether Jenkins resignation was the “shock” it appeared to be doesn’t matter – the reaction of Gillard and Co was brilliant. By appointing soon-to-be ex Liberal MP Peter Slipper as Speaker, Gillard has seized a bit of a buffer for her minority government and all but ruled out being forced into an early election.
Tony Abbott’s strategy of playing the wrecking ball in the hope of forcing an early poll has been stymied for now. He’ll need to spend part of the summer coming up with a new strategy, or hope that the Government can stumble in some other way.
The start of the carbon tax next July – which could upset some voters – might provide his next best chance to gather the momentum the Coalition has clearly lost.
Outside of that major battle, there are some other little brawls worth noting:
Rivals of Fairfax Media were always going to bask in John B Fairfax’s decision to sell his stake in the company and Kerry Stokes was quick to get the boots in, declaring that the sell off was due to the fact Fairfax have “no plan” and the family didn’t think much of the company’s future.
Fairfax Media chairman Roger Corbett hit back yesterday, saying Stokes’ comments were not appropriate. “I think one could make comments, if one chose to, about Kerry Stokes and some of his business dealings, which we have refrained from doing.”
It’s all very much handbags at 10 paces, but Corbett’s doesn’t have much to fire back with in this stoush. Fairfax shares have fallen from $1.36 to 77c in the last 12 months and the company has a market capitalisation of just $1.8 billion. It also has over $1 billion in debt.
Stokes, on the other hand, has a mining equipment business protecting him from the ill winds hitting some sectors of the media.
But Kerry Stokes isn’t having it all his own way. His attempt to take the 28% of hire group National Hire is being stymied by Tasmania’s richest man, Dale Elphinstone, who believes Stokes’ offer of $3.75 is too low. Given an independent expert valued the company at $3.66 to $4.30, he may well have a point.
But Elphinstone says he is a long-term investor in National Hire and rival hire business Coates, which National Hire owns at 45% stake in.
As he told the Australian Financial Review yesterday, he’s not sure about the idea of being a minority shareholder in National Hire if Stokes does manage to take it private.
Analysts have mused that Stokes may be making the National Hire bid as a precursor to a bid to the 44% stake in Coates owned by private equity firm Carlyle Group.
But Elphinstone says he might want to bid for that stake if Carlyle decides to sell.
That could really kick of a battle between Stokes and the Tasmanian.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
