BP's green exit

👋 G’day

Today’s brief:

• BP reverses its green pivot, ramps up oil.

• These high-profile lawyers are racking up billables in tech cases.

• Musk’s lawyer now charges $3000/hr – seriously.

Enjoy your morning ☕️

PRACTICE POINTS

Shareholder strikes rise

• Shareholder activism is still on the rise in 2024. The average vote against rem reports is sitting at 42%—better than last year’s 48%, but still a jump from 2022’s 32%. A total of 26 of ASX200 companies received strikes on their reports (down from 30 in 2023, but up from 16 in 2022). The main sources of shareholder frustration? Governance issues, regulatory probes, execs pocketing hefty short-term bonuses that don’t match company performance, and long-term incentives that aren’t nearly challenging enough: KWM

• In a new decision, the Victorian Supreme Court ruled that retail leases can include upper limits on rental increases without breaching the Retail Leases Act 2003 (Vic). Under the RLA a retail premises lease can’t prevent the reduction of rent, but the RLA is silent on capping rent hikes. But now we know that caps on rent increases aren't off-limits: Ashurst

• In FIRB developments, Treasurer Jim Chalmers has given the green light on Qatar Airways’ acquisition of a 25% interest in Virgin Australia, subject to enforceable conditions. These include ensuring Australian board representation and paramount data protection. Chalmers said the deal will boost competition in the aviation sector and strengthen Virgin’s capacity on key long-haul flights: Capital Brief

WORD ON THE STREET

Musk’s $3000/hr lawyer

• Want to hire Elon Musk’s lawyer? That’ll cost you a cool US$3000 (A$4700) an hour. Alex Spiro, the go-to for high-profile clients, is one of the select few at Quinn Emanuel now commanding that sky-high rate. And he’s not alone—top US lawyers are seeing their fees soar, with senior partners now billing US$2k+ an hour: Reuters

• Lawyers are racking up the billables in these high-stakes tech bro cases. David Friedlander of King & Wood Mallesons is representing WiseTech directors caught in the fallout. Clayton Utz’s Jonathan Slater has been acting for White and his private company. HSF and Seyforth Shaw are also involved in the matter. Meanwhile, Cannon-Brookes just won a NSW Supreme Court case against his former secretary. Tim Breakspear SC, in his corner, also advised by K&L Gates partner Dominic Fleeton. And then there’s Dovetail, which faces a serious sexual assault claim by one of its own lawyers. Dovetail has engaged Gilbert + Tobin for representation in the Federal Court: AFR

• Anyways, the AG has appointed 8 new General Members to the Administrative Review Tribunal for three-year terms, expanding the team overseeing key legal decisions.

TALKING POINTS

Part-time property mogul?

• Peter Dutton: part politician, part property mogul. Over 35 years, the opposition leader has racked up $30m in property deals across 26 properties, making him one of Australia’s wealthiest-ever political contenders. Dutton bought his first home at 19 (probably back when you could snag a 3-bedroom for $40k) and now promises policies to help everyday Aussies follow in his property footsteps: SMH

• With Trump in, companies are permitted to do a 180. Oil giant BP is now reversing its green pivot, doubling down on fossil fuels with an extra $10bn a year for oil and gas projects. This shift comes as it slashes renewable spending by $5bn. Blaming “misplaced” faith in a green transition, the move follows a 61% drop in fourth-quarter profits compared to last year. BP is underperforming and under pressure, and fossil fuels are its safest bet: BBC, The Economist

• The US and Ukraine have struck a new deal on minerals. Initially, the terms, proposed under Trump, were a tough pill to swallow, framed as repayment for military and financial aid against Russia. But the revised deal is more Ukraine-friendly, requiring the country to funnel 50% of future mineral revenue into a fund partly owned by the US. The fund will be reinvested into Ukrainian projects: Financial Times

• Economic turmoil may be fast approaching. First-time home buyers across Australia are feeling the pinch of mortgage stress, with Domain reporting that high interest rates and skyrocketing property prices are to blame. Major cities are seeing increased pressure as buyers struggle to manage rising costs: Bloomberg

TREASURY

DEAL ROOM

IPO buzz

• The third IPO of the year has arrived. Wilson Asset Management has launched a new investment company, WAM Income Maximiser, and sources say they’re aiming to raise up to $400m: AFR

• Selfwealth has made an M&A switch, opting to commit to rival bidder. The platform received another counterproposal from Svava for $0.28 per share. That caused Bell Financial Group to tap out despite its earlier bid at $0.25 per share fres. So, that leaves Selfwealth with an inked SID with Svava. HSF’s Rodd Levy acts for Selfwealth.

• BlueBet Holdings makes a competing bid to buy PointsBet Holdings via a scheme. The mixed-cash-scrip offer values PointsBet at a handsome ~$360m, which is slightly below its trading market cap. The offer for $1.02-$1.09 per PointBet share is described as “highly conditional”. PointBet remains subject to exclusivity arrangements with MIXI, Inc. for its $1.06 scheme bid.

• After Biden nixed the deal over national security worries, Nippon Steel isn’t backing down. The Japanese giant is pushing forward with its US$14.1bn takeover of US Steel, especially after Trump claimed to back a partial investment by Nippon in the company: Wall St Journal

SECTOR SPECIFIC

Richard White’s power play

🚜 DIGGERS

• Lynas Rare Earths has seen its profits plummet by 85%, with China’s iron grip on the market keeping prices down. China continues to dominate, controlling 70% of global rare earth extraction and 87% of processing: AFR

• BHP’s CEO is doubling down on the company’s copper ambitions, boasting a 10% production boost in just one year and forecasting a 24% jump over the next three. Henry proudly declared BHP the world’s top copper producer, with a massive 44bn tonnes of copper resources: Australian Mining

• When FOMO hits. NGEx Minerals, valued at $3.2bn on the TSX, was left behind last year when BHP and the Lundin family teamed up to buy Filo Corporation for almost $4.4bn. Now, CEO Wojtek Wodzicki is gearing up to pitch to Australian fund managers, with a roadshow set for April. NGEx is well-funded, with $243m in cash, and is positioning its Lunuasi copper-gold mine as a strategic neighbour to BHP/Lundin's Josemaria project: AFR

🏦 FIN

• A new report shows more companies have exited the ASX in the past 2 years than at any time since the '90s recession. But what's even more alarming is the long-term slide in the ASX's market cap relative to global markets (2.1% in 2013 to just 1.6% today): AFR

• Health insurance premiums are on the rise, with the average increase hitting 3.7%—the biggest jump in 7 years. NIB is leading the charge with a hefty 5.8% hike, while Bupa and Medibank aren’t far behind, upping their premiums by 5.1% and 4%, respectively: AFR

🏡 RETAIL & REAL ESTATE

• Woolies CEO Amanda Bardwell is rolling up her sleeves with a bold $400m cost-cutting plan and slashing its number of products, all in a bid to win back investor confidence after a 20% drop in interim net profit. Woolies shares have fallen 7% over the past year, while Coles has been riding high with a 24% gain: AFR

• Healthscope, which is Australia's second-largest hospital operator, is closing its maternity units in Darwin and Hobart due to workforce shortages and declining birth rates. This move has sparked political backlash, with critics accusing the Albo Government of failing to prevent such shutdowns in the struggling private hospital sector. Let’s see how this impacts HMC Capital's potential bid: AFR

📱 TECH

• Salesforce is all-in on Australia, pledging to invest A$3.9bn over the next 5 years. The tech giant plans to funnel this into AI, workforce development, and sustainability projects: Capital Brief

• In a dramatic twist, WiseTech founder Richard White has reclaimed control of the board as executive chairman, reversing his earlier move from CEO to a consulting role. White, unhappy about being sidelined, declared, “I am WiseTech”. And now he has full strategic and operational control. His return triggered the abrupt resignation of 4 independent directors in protest. With a non-independent chairman and most independent directors now gone, the tech giant no longer meets ASX governance guidelines, which recommend a majority of independent directors: The Australian, AFR

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