Focus shifts to the top line

Friday 15th December 2000

COMPANY MOVES

On the home front, companies and industries continued rationalising and restructuring. As some firms rushed to achieve scale others shed "non-core" or unwanted businesses. An increasing number of firms are now focusing on boosting revenues rather than cutting costs.

Fletcher Challenge pursued its group breakup strategy. First off the blocks was the July sale of the Paper division to Norway's Norske Skog for $5 billion. Energy, after some to-ing and fro-ing with the Commerce Commission, went to Royal Dutch/Shell in a deal that could be worth $4.6 billion, depending on the vagaries of the New Zealand dollar and Capstone Turbine's share price. If shareholders' approval is given early next year Building and Forests will stand alone alongside a new company, Rubicon.
Brierley Investments moved its head office and primary listing to Singapore. Lion Nathan went to Sydney.
Fisher & Paykel acknowledged criticism from some investor quarters by appointing Deutsche Bank to examine its business. A decision is expected soon on whether the fast-growing healthcare products business will be split off and listed separately from the whiteware division.
DB Group became a pure brewer again, selling Corbans Wines to Montana for $151 million. Lion Nathan promptly grabbed a 28% stake in Montana and said it wanted 51%. It faces a bidding war with Montana chairman and 20% holder Peter Masfen, who may also bid for 51%.
Tranz Rail is breaking itself up after a lengthy internal review. Its passenger and refrigerated freight businesses are on the market, as are the share stakes of Fay Richwhite (14%) and Wisconsin Central (24%).
Telecommunications got a big shakeup with the announcement Telstra Saturn will spend $1.2 billion building a national broadband network. That and other news saw Telecom's share price drop from a high of $9.81 to a low of $5.15.
A host of operators raced to equip the country with wireless broadband networks. Clear Communications allocated $120 million to an LMDS (local multipoint distribution service) rollout, joining Wilson Neill's RadioNet, Walker Wireless and SafetyNet in a rush for customers.
A consortium of mostly New Zealand investors bought Ansett New Zealand from News Ltd and rebranded it Qantas New Zealand.
Natural Gas Corporation bought TransAlta New Zealand for just over $1 billion, creating the country's largest energy retailer.
PDL sold its profitable but commodity-driven plastics division to management for $25 million and said it would concentrate on the higher value-added electronics activities.
Entrepreneur Eric Watson backed a host of smaller Australian and New Zealand credit information and debt collection companies into listed shell Frontier Petroleum to create Receivables Management Group, a rival for Baycorp.
In the year's major "strange bedfellows" deal, cinema group Force Corporation and internet service provider Ihug talked about merging. Negotiations came to an acrimonious end.

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