Australian share market edges lower amid $5bn takeover frenzy

While the Australian share market lost ground on Monday, led by a fall in real estate stocks, billions worth of deals were lobbed or closed.

The Australian share market edged lower on Monday, ending a six-day winning streak, after officials at the US central bank hosed down expectations of early interest rate cuts.

At the closing bell, the benchmark S & P/ASX200 sank 0.2 per cent, or 16.3 points, to reach 6,436.4, while the All Ordinaries fell a similar amount to 7,649.6.

The Australian dollar firmed to buy US 67.15c at the end of trading.

On Sunday (Monday AEST), Federal Reserve Bank of Chicago president Austan Goolsbee, who sits on the Federal Open Market Committee, said it was too early to declare that the Fed’s inflation fight was over.

“We’ve got to get inflation down to target,” Mr Goolsbee said, adding “until we’re convinced that we’re on path to that, it’s an overstatement to be counting the chickens.”

Meanwhile, Atlanta Fed president Ralphael Bostric, who will vote on the rate-setting committee next year, said he didn’t envision rate cuts occurring until well into 2024.

Interest rate sensitive shares edged lower after Fed policymakers warned that rates could rise in the US again. Picture: AFP / Saul Loeb

“There’s still a lot of momentum in the economy. My outlook says that inflation is going to come down but it’s not going to like, fall off a cliff,” Mr Bostic said in an interview with CNBC on Friday (Saturday AEST).

The warnings come despite Fed policymakers flagging after their meeting last week that they expected rate cuts from March 2024.

Locally, eight of 11 industry sectors finished in the red, led by a 1.4 per cent fall in the interest rate sensitive real estate sector.

Stockland dropped 3.6 per cent to $4.35, Mirvac lost 2.9 per cent to $2.04, Dexus slid 1.8 per cent to $7.56 and Charter Hall sank 1.6 per cent to 12.05.

Consumer staples also slid with the two major supermarket chains Coles and Woolworths, falling by 1.2 per cent to $15.86 and 0.7 per cent to $36.40, respectively.

In what was a busy day of company news, shares for Adbri rocketed 31.3 per cent to $2.98. The brick maker is in talks with CRH and Barro Group over a $3.20 a share takeover bid, valuing the business at $2.1bn.

Lendlease Group said it had reached an agreement on the sale of 12 Australian masterplanned communities projects to Stockland and capital partner, Supalai Australia, for $1.3 billion. Despite the sale, shares lost 1.2 per cent to $7.42.

Pacific Smiles soared 18 per cent to $1.41, its highest since September 2021, as the dentistry chain said it had received an unsolicited, non-binding takeover offer from Genesis Capital at $1.40 a share.

Adbri, which manufacturers bricks, among other construction materials, has received a takeover bid valuing the company at $2.1bn. Picture: Supplied.

Shares of Link Administration Holdings rose 27.1 per cent to $2.16, a record intraday percentage gain, following a takeover offer by Mitsubishi. The Japanese company has offered $2.10 a share, plus a 16c bonus dividend that will be franked at 25 per cent.

Tabcorp surged 23.1 per cent to 91c after the betting company announced that it had secured a two-decade extension of its Victorian Wagering and Betting Licence at a cost of approximately $860 million. The deal means the firm maintains exclusive rights to wagering in its outlets and pubs across the state.

Neuren Pharmaceuticals shares vaulted 29.5 per cent to $22.20, their highest level ever. The biopharmaceutical company said the second phase of clinical trials for the NNZ-2591 drug for children with Phelan-McDermid syndrome showed significant results.

Santos slid 1.6 per cent to $7.63 despite the gas giant receiving environmental approvals to commence drilling on its $5.8bn Barossa project in the Bonaparte Basin of the Timor Sea. The project will provide a new source of LNG to its existing facility in Darwin from 2025.

Originally published as Australian share market edges lower amid $5bn takeover frenzy