ACCC approves Telstra structural separation: Midday roundup

The Australian Competition and Consumer Commission has finally approved Telstra’s bid to structurally separate its business, as part of a deal with the Government that will allow the construction of the National Broadband Network.

Telstra plans to separate its retail and wholesale divisions as part of the reforms passed in Parliament.

ACCC chairman Rod Sims says the structural separation was allowed after changes were made to the original agreement put forward by Telstra.

“These changes were made by Telstra following concerns raised by the ACCC, and provides additional assurance that the equivalence and transparency measures will remain appropriate and effective over time,” he said in a statement.

“These measures should result in greater competition in telecommunications markets as the industry moves to the new wholesale-only network. More effective competition in telecommunications markets will result in improved service offerings to consumers.”

The acceptance of the structural separation undertaking ensures a distinct change in the makeup of the Australian telecommunications market, as the NBN prepares to become the main infrastructure player.

“This SSU has been the subject of extensive consultation and public discussion,” he said. “The ACCC acknowledges contributions from industry, as well as the preparedness of Telstra and NBN Co to modify the undertaking in response to legitimate concerns.”

This comes after Telstra signed a wholesale service agreement with the National Broadband Network Company earlier this week.

Billabong rejects new offer from TPG

Billabong has rejected a third takeover offer and called off negotiations with private equity giant TPG.

The latest bid was $3.30 per share, which followed an unsuccessful bid to buy all of Billabong’s shares for $3 each last week.

Shares lifted 7% after the announcement yesterday to $3.10.

Company founder and major shareholder Gordon Merchant, along with fellow director Colette Paull, have rejected any move by the board to facilitate the bid.

The two directors sent a letter to their fellow board members yesterday saying they would not endorse Billabong taking any steps to assist a proposal by TPG even if it offered $4 per share to facilitate due diligence.

“The Board has considered this revised price and has unanimously determined that it still does not reflect the fundamental value of the company in the context of a change of control,” Billabong said in a statement.

However, Billabong said the board was open to any other parties, including TPG, as long as any proposal is in the best interests of the company and its shareholders.

QBE profit plummets 45%

QBE Insurance Group’s annual net profit dived 45% during what it described as one of the worst years for natural disasters and catastrophic events.

QBE today reported a statutory net profit of $US704 million ($AU655 million) for the 12 months to December 31, down from $US1.278 billion last year.

Australia experienced floods in Queensland, bushfires in Western Australia, and severe storms in Melbourne. Riots in Europe and floods in Thailand added to the huge number of claims.

In the US, where QBE is a major insurer, Hurricane Irene, wildfires, floods, tornadoes, hail, wind and snow storms also took a chunk out of QBE’s profits.

Revenue increased 37% to $US20.19 billion, in part owing to a 34% increase in gross written premium to $US18.3 billion.

QBE said in a statement that shareholders would receive a final dividend of 25 cents, with 6.25 cents of that being franked.

Long-serving chief executive Frank O’Halloran also announced that he will be stepping down after 14 years at the helm.

He will be replaced by current chief executive of global underwriting operations John Neal.

“Frank is keen to continue working with QBE, and we are pleased that he has agreed to return as a non-executive director shortly before the 2013 annual general meeting,” chairman Belinda Hutchinson said in a statement on today.