BHP's threat

👋 G’day

Today’s brief:

• Rio Tinto, Glencore in A$260bn merger talks.

• Big Four’s legal ambitions gain traction.

• Ex-HSBC banker sues after using work phone to discuss supplying drugs.

It’s Friday. Here’s the latest to close out your week. 👇

PRACTICE POINTS

Dutton hits “woke bankers”

• Under Dutton’s coalition government, banks will face a new loan regime designed to curb the rejection of loan applications from companies in sectors that clash with ESG commitments. The move aims to stop the “de-banking” of fossil fuel and forestry businesses, requiring banks to lend to creditworthy companies based on traditional metrics like profitability.

• Virgin has lost its appeal against a Fair Work Commission ruling that reinstated a flight attendant dismissed for drinking a glass of prosecco 7.5 hours before a red-eye, breaching their no alcohol 8 hours before a flight policy. The Commission held that the attendant’s interpretation of the drug and alcohol protocol as guidelines, rather than strict rules, was reasonable.

• After falling victim to a fraudulent invoice, the District Court orders Inoteq Pty Ltd to pay $190k. Impersonating Mobius Group, hackers fraudulently requested payment and Inoteq paid up. Months later, Mobius took legal action to recover the $190k which remain unpaid. Inoteq tried to argue it shouldn't have to pay that money because Mobius had failed in its duty of care by not taking further steps to protect its email accounts. The Court ultimately found Inoteq didn't do enough to protect itself, requiring it to pay Mobius the $190k.

WORD ON THE STREET

The “Big Four Fear”

• In Tuesday's Point Blank, we covered KPMG’s move to open a law firm in Arizona. The “Big Four Fear” dates back to the late ‘90s when the Big Four first ventured into legal services—only to be thwarted by regulatory changes after the early 2000s accounting scandals. The chatter resurfaced in the mid-2010s, as KPMG, Deloitte, and others built huge numbers of lawyers globally. But despite the noise, none could practice law in the world’s largest legal market—until now. With their vast resources (much bigger than Big Law), the question is: will this cycle be any different?

• It’s regulatory musical chairs. ASIC has nabbed ACCC CEO Scott Gregson as its new chief executive, marking the latest shake-up in the regulator’s ongoing restructure.

• Hamilton Locke M&A partner James Tannock has joined Kain Lawyers as director in Sydney. Kain has been on a recruitment spree, recently poaching big wigs like the former head of PwC Australia’s legal business.

• A prominent Sydney barrister has been banned from practising for one year after being found guilty of unsatisfactory professional misconduct for harassing three women.

TALKING POINTS

TikTok to shut down

• TikTok is set to shut down its US operations on Sunday, when the federal ban takes effect. But, Trump, whose term begins the next day, is reportedly considering an executive order to delay the shutdown by 60-90 days.

• Meet a new AI discovery assistant. Epiq has launched a tool that reads your discovery review protocols and automatically generates prompts and models to carry out the review, simultaneously checking for issues, privilege and responsiveness.

• The ceasefire agreement between Israel and Hamas now hangs in limbo. Less than a day after Qatar’s prime minister announced a ceasefire in Gaza, Israel’s cabinet delayed a crucial vote on the deal.

• Once the king of casinos, Star Entertainment Group is now burning through cash, scrambling for funding, and facing collapse—analysts say it’s a coin toss if they fall over. Here’s how it all went wrong.

TREASURY

DEAL ROOM

Rio Tinto, Glencore merger

• Rio Tinto, the world’s second-biggest miner (US$103bn), and Glencore (US$55bn) are reportedly in early talks about merging, per Bloomberg insiders. If it happens, the deal could become the mining sector’s biggest ever—catapulting the combined entity past BHP (US$126bn). Looks like history is repeating, as Glencore previously proposed a merger with Rio in 2014 (AFR).

• Insignia’s bidding war continues. Insignia Financial received a revised NBIO from CC Capital, at a price of A$4.60 per share. That’s a $0.30 premium to Bain Capital’s last bid.

• Sigma-Chemist Warehouse mega deal is set to make waves. Sigma’s $30bn merger with Chemist Warehouse is set to rattle the ASX 200, triggering $537m in trades. Buckle up for the shake-up.

• Dubbed the “Netflix of e-Commerce” by Forbes, Rokt has acquired mParticle for $300m, with an IPO planned for 2026. Read about its latest round funding below.

• Allens and KWM top the M&A league tables, with Allens leading in deal value in Australasia and KWM topping Asia Pacific deal value (per MergerMarket).

• Global data centre M&A soared to US$57bn in 2024, with another US$29bn agreed but still in progress. The big trend? A flood of private equity into the sector.

SECTOR SPECIFIC

Ex-HSBC banker’s cover

🚜 DIGGERS

• Rio Tinto, the world’s top iron ore miner, posted record low-grade ore shipments to Chinese steelmakers in Q4. The rise in lower-grade shipments reflects an ageing Pilbara operation. Heavy rainfall made matters worse, forcing Rio to eat into stockpiles.

• One of the biggest energy IPOs in a decade could be around the corner. Venture Global, the fast-moving LNG exporter out of Virginia, is set to go public on the NYSE, aiming to raise US$2.2bn and a valuation north of US$100bn.

• Liontown led a lithium rally after Morgans pointed to stabilising spodumene prices and recovery on the horizon. Pilbara Minerals and MinRes joined the party, with analysts calling lithium stocks oversold. If the rebound holds, a re-rate could be on the cards.

• More than 300 jobs will be cut from mining contractor Golding Contractors, which is linked to GFG Alliance's Whyalla steelworks. SA Energy Minister says the job losses “could have been avoided”.

🏦 FIN

• An ex-HSBC banker fired for using his work phone to discuss supplying drugs has now sued the bank, claiming it was all just a whistle-blowing cover. Yann Adem is claiming $5m at London’s employment tribunal from the “career-ending” dismissal.

• Macquarie is refusing to commit to its climate targets, joining a broader pullback by major asset managers from environmental goals.

• CBA calls for a ban on card surcharges. Treasurer Jim Chalmers has flagged the government’s plan to end surcharges on all debit purchases. But, in its RBA submission, CBA has gone further, urging the RBA to outlaw both debit and credit card surcharges.

• BOQ is the latest bank under fire for charging fees on dead customers' accounts, racking up $158k in fees and interest over four years.

🏡 RETAIL & REAL ESTATE

• After chaos in Sydney with over 1000 train cancellations on Wednesday, commuters caught a break when the Fair Work Commission blocked rail unions from taking further action until next week, when their protected action case will be heard. Sydney Train workers are demanding a 32% pay rise over 3 years.

• Metrics Credit Partners has partnered with Billbergia Group to launch $3bn luxury apartment overlooking Hyde Park in Sydney. The move signals confidence in the high-end apartment market, despite the broader slowdown in residential property.

📱 TECH

• Rokt employees are set to become millionaires as the company struck a $5.6bn new funding round valuation. Tiger Global Manage, Square Peg Capital, Barrenjoey and SecondQuarter joined the round.

• Afterpay owner Block has now agreed to a US$80m (A$128.5m) fine after 48 US state regulators found the NYSE- and ASX-listed fintech had weak policies for tackling money laundering.

P.S.

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