Australian sharemarket snaps three-day losing streak, Crown shares soar after surprise $8bn takeover offer

Most sectors rose on the Australian Stock Exchange today, with Crown’s shares soaring past the casino giant’s surprise takeover offer price.

The Australian sharemarket snapped a three-day losing streak on Monday, with most sectors gaining ground, while beleaguered casino giant Crown Resorts was the standout performer after a surprise $8bn takeover bid.

The S&P/ASX200 closed 0.66 per cent higher at 6752.5 while the All Ordinaries Index rose 0.51 per cent to 6995.

OpenMarkets Group chief executive Ivan Tchourilov said the local bourse marched to its own beat after US markets closed mixed on Friday.

Crown received an unsolicited, non-binding and indicative proposal from New York-based private equity giant The Blackstone Group of $11.85 cash per share, sending its shares soaring by 21.4 per cent to $11.97.

The offer is subject to conditions, including regulatory confirmation that a Blackstone-owned Crown is considered suitable to own and operate the Sydney, Melbourne and Perth casinos.

The board has not yet made a recommendation to shareholders — the biggest being reclusive billionaire James Packer — and is assessing the proposal. Blackstone already has a 9.99 per cent stake in Crown.

Crown shares eclipsed the takeover offer price, suggesting the bidder will have to sweeten the deal. Picture: William West/AFP

It comes just two days before the company faces a royal commission in Victoria over its explosive money laundering scandal.

Another major mover was department store chain Myer, which gained 5.97 per cent to 35.5 cents.

“The stock looks interesting at current levels with a lot of buying pressure coming through today,” Mr Tchourilov said.

“Their retail outlets obviously struggled during COVID, but online sales have done quite well, which has kept them going.

“Meanwhile, Myer’s short-term liabilities – due within 12 months – are around $650m, and it only has $300m or so in cash and short-term receivables, due within the same time frame.

“They clearly still have balance sheet worries, which makes it quite difficult to put together a strong investment case for them.”

Myer shares rose but analysts aren’t convinced the retailer is a compelling investment. Picture: NCA NewsWire/Luis Ascui

Online retailer Kogan was a laggard, shedding 3.46 per cent to $13.67.

The materials sector was weaker after iron ore prices fell. Rio Tinto lost 1.15 per cent to $107.81, BHP retreated 0.89 per cent to $44.50 and Fortescue slumped 4.25 per cent to $19.16.

CommSec analyst James Tao said there were continuing concerns about Chinese demand for Australia’s key export.

“There’s a number of steel mills that will be shutting down production or easing production for environmental reasons,” Mr Tao said.

Most insurers fell by between 2 and 3 per cent due to the foul weather in NSW and southeast Queensland.

IAG said it had received more than 2100 claims as of Sunday night and it was too early to accurately determine the net cost of the flooding and storms.

IAG shares dropped 2.26 per cent to $4.75.

Insurance claims for property damage caused by epic flooding in NSW and southeast Queensland are expected to surge. Picture: NCA NewsWire/Jeremy Piper

Suncorp said it had received about 1300 claims by Monday morning.

Shares in Suncorp eased 2.07 per cent to $9.92.

Telstra improved 1.25 per cent to $3.25 after providing an update on its plan to split the business into four entities, largely to better realise the value of its infrastructure assets.

The telco says investors will hold shares in the new holding company on a like-for-like basis with no change to their ownership levels, and a recommendation from an independent expert is expected to be released in early September.

If the plan goes ahead, completion is anticipated by December, Telstra says.

ANZ appreciated 0.5 per cent to $28.37, Commonwealth Bank added 0.44 per cent to $85.08, National Australia Bank lifted 0.73 per cent to $26.12 and Westpac put on 0.57 per cent to $24.66.

Both CBA and ANZ announced they had reached an agreement to settle a class action commenced in the US in 2016 in relation to the bank bill swap rate and the trading of BBSW-based products.

They said the settlement was without admission of liability, the terms were confidential and the financial impact was “not material”.

The Aussie dollar was fetching 77.33 US cents, 55.76 British pence and 64.95 Euro cents in afternoon trade.

Originally published as Australian sharemarket snaps three-day losing streak, Crown shares soar after surprise $8bn takeover offer