Ten Network prepares for CanWest sell down, Walker prepared to step down from Fairfax: Economy Roundup

Ten Network Holdings has been placed in a trading halt as its major shareholder CanWest Global Communications prepares to sell down its 50.1% share.

The company also reaffirmed its earnings guidance, and announced it expects earnings before interest, tax depreciation and amortisation to be $151 million for the year ending 31 August.

Ten requested a trading halt until 31 September or until an announcement is made, while it also renegotiated the terms of its contract with chairman Nick Falloon as his previous contracted expires on 31 August.

CanWest is expected to sell its stake in Ten for between $1.25 and $1.30 per share, amounting to $680 million. The company has faced a number of lender deadlines to present a plan to address its debt levels of $4.8 billion, with the most recent deadline to expire on 30 September.

Meanwhile, Ten announced its drawn debt as of 31 August will amount to $450 million, along with net debt of $445 million and cash of $5 million. Television costs were reduced by 2% during the full year.

Woolworths proposed takeover of hardware chain Danks Holdings has been approved by shareholders, with two major shareholders in Danks approving the offer from Carboxy – two-thirds owned by Woolworths.

“I am delighted to see the level of support Danks shareholders have shown for the recommended offer, especially the Danks family,” Woolworths chief executive Michael Luscombe said in a statement.

“Danks is a profitable, well run business which is why we are able to offer a significant premium to Danks shareholders compared to the historical trading price of Danks…We look forward to working with the team at Danks to support independent retailers and improve the competitiveness of the local hardware stores.”

Fairfax chairman to step down if shareholders ask

Fairfax chairman Ron Walker has said he will step down from the company at the next general meeting if the shareholders decide, but that a global search for a new chairman “won’t happen”.

“I will be talking to shareholders next Monday and Tuesday with Roger Corbett, and as a result of that I will make my intentions known to the public,” he told AAP.

“I had only intended to stay… for another six months but now I have been convinced by my directors that the board renewal and chairmanship bedding-in will take place in a seamless way, and therefore I am more inclined to step down at the AGM having served six years.”

The decision comes after responses opposed his statement last week that he would not step down until the second half of 2010. The company board was immediately divided, but Walker has said he will listen to the opinions of institutional shareholders.

New figures from the Housing Industry Association show the number of new houses sold during August jumped by 11.4%, following a 0.1% rise during July, due to the number of first home owners looking to take advantage of the Government’s extended grants.

The rush is due to the reduction in the first home owner’s grant which is due after 30 September.

“The boost to new home construction from the tripling of the first home owner grant for new dwellings will be apparent throughout the second half of 2009 and well into 2010,” HIA chief economist Harley Dale said in a statement.

Shares lower after Fed meeting in US

The Australian sharemarket has opened lower today after disappointing results on Wall Street and in commodities markets.

The benchmark S&P/ASX 200 index was down 8.4 points or 0.18% to 4725.7 at 11.55 AEST. The Australian dollar also slipped from its 13-month high to US86c.

Commonwealth Bank shares increased 0.3% $50.16, while NAB shares lost 0.5% to $30.10. Westpac shares gained 0.6% to $25.45, while ANZ lost 0.2% to $23.54.

Global Airports head Mike Fitzpatrick is considering legal action against Macquarie Airports to force disclosure about its debt levels, he said in an interview with Business Spectator.

The comments come after Fitzpatrick’s company proposed an alternative bid for the management rights of the company, after Macquarie announced its own bid.

“I think we understood when we went public that basically this week was really going to be about trying to force disclosure,” he said. “The shareholders are quite right in basically saying we put up a proposal which they’re very interested in, but we haven’t provided a solution to the poison pills.”

“Our argument, as we’ve said, is that we’d like to, but we can’t get the disclosure out of the independent directors.”

Meanwhile, according to The Australian, regional lending group Suncorp-Metway has said it is in talks with US-based private equity firm L. Janusz Hooker in order to sell off its Hooker Corporation real estate business in a deal reportedly worth over $60 million.

Suncorp said in a statement to the ASX that discussions are not completed and there is “no certainty a transaction will eventuate”, but it will update the market when appropriate.

Federal Reserve sees recovery, but keeps rates low

In the US, the Federal Reserve overnight upgraded its expectations of the US economy, saying activity has begun to recover but that interest rates will be kept at historically low levels in order to prompt more economic activity.

“Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn,” the Fed said in a statement after its two-day meeting.

“Conditions in financial markets have improved further and activity in the housing sector has increased,” it said.

However, Wall Street investors were anxious after the announcement, which sent the Dow Jones Industrial Average down 81.77 points or 0.83% to 9748.1.