Gold bet pays off

G’day.

Welcome to Point Blank.

Today’s brief:

• Northern Star makes a $5bn move on De Grey Mining.

• Government backs ACCC crackdown on Big Tech.

• What you need for a market float – a checklist for IPO success for 2025.

It’s December! As we count down to the end of year break, we hope your Christmas trees are up and the festive spirit is in full swing.

Here’s today’s insights to kickstart your week 👇

 💼 Practice Points

• The anti-money laundering bill has passed, forcing lawyers to report clients suspected of money laundering. The Law Council, a vocal critic, is now focusing on pushing for limits to the new law, warning it could damage the trust that underpins the lawyer-client relationship.

• The federal government is backing the ACCC’s push for new powers to regulate tech giants like Apple, Google, and Facebook, including enforcing service-specific codes of conduct. Under the reforms, the minister, on the ACCC’s advice, can designate platforms that pose the biggest risk to competition. Once designated, these platforms must comply with the codes. First up on the hit list: app marketplaces like the Apple App Store and Google Play Store.

• Non-competes in full swing. Perpetual is taking legal action against former senior wealth adviser Daniel Elias, accusing him of poaching its high-net-worth clients after joining rival Morgan Stanley as a senior VP in August. NSW Supreme Court granted orders barring Elias from contacting Perpetual’s clients, alleging he breached post-employment restraints. Elias plans to defend the claims, with clients set to provide evidence on his behalf. A timely reminder on how restraint clauses play out for big players.

🏘️ Word on the Street 

• Who says clerks don’t do any of the heavy lifting? Shine Lawyers is facing backlash over “enormous costs” in the West Australian stolen wages class action, much of it racked up by “unqualified” clerks. To put matters into perspective, Shine was charging $211 per hour above the Federal Court scale for their work.

• A QLD woman, under the pseudonym XFZ, is facing disciplinary action for allegedly breaching her practising certificate. XFZ, who was only authorised to volunteer or work on approved pro bono projects under her restricted certificate, allegedly appeared as a solicitor in the AAT to represent a man who was not a client of the pro bono service.

📢 Talking Points

• Is copying and pasting in judgements acceptable? Well, the High Court has been asked to weigh in. Elizabeth Kelly is challenging a Federal Court decision to set aside her $160k ruling, after the judge copied and pasted key parts of Kelly’s submissions in his judgement, suggesting a lack of independent decision-making. Kelly argues this is just common practice for busy judges.

• Vape showdown at the US Supreme Court. The US FDA’s refusal to approve flavoured e-cigarettes, citing risks to youth health, heads to the Supreme Court today. The companies argue the FDA didn’t follow proper legal procedures in denying their applications.

• Russia’s plunging currency spells trouble. With inflation above 8% and interest rates hiked to 21%, the falling rouble is driving up the cost of imports, including military and consumer goods, as well as deepening budget deficits. Analysts predict a hard landing for Russia’s economy in 2025 as the financial toll of war becomes unavoidable. The U.S. Treasury’s latest sanctions on Gazprombank and other banks are pushing the Russian Ruble to its weakest level since early 2022, dropping 10% against the dollar before a slight rebound.

• 2024’s top listings—GYG, Chemist Warehouse, and DigiCo—share a few key traits. For a successful IPO in 2025, here’s the checklist:

  • Founder Power: Investors want founders who’ve been there from day one, respect shareholder money, and won’t quit creating value.

  • Alignment: Founders with a big stake—they’re the most motivated to make the listing work.

  • Liquidity Squeeze: Deals need size and free float to get into an index within 6-12 months. Some shares are also locked up in escrow to avoid a sell-off but there’s still enough float to attract index funds.

  • Retail Hype: Strong backing from retail broker networks means everyday investors support the company’s story.

  • Growth & Margins: Investors flock to companies with clear growth plans, like GyG’s expansion, DigiCo’s data centres, and Chemist Warehouse’s global push.

🏦 The Treasury

🤝 Deal Room

• Northern Star is snapping up De Grey Mining in a $5bn deal, betting big on the soaring gold price. The acquisition secures Northern Star the undeveloped Hemi mine in WA’s Pilbara—a project poised to produce 530k oz annually for a decade. De Grey shareholders get 0.119 Northern Star shares per share, valuing the offer at a 36% premium. Northern Star’s MD, Stuart Tonkin, calls it a move to bolster their portfolio with a "low-cost, long-life" gold asset. KWM acts for Northern Star while G+T acts for De Grey Mining.

• Telstra is apparently making moves again, with CEO Vicki Brady signing a deal to acquire Boost Mobile, the pre-paid SIM provider with over 1 million users. Boost, which already uses Telstra’s network, operates in 10,000 locations across Australia. For context, Optus paid $250m for Amaysim in 2020, which had a similar user base. And there was Telstra’s last major acquisition was cloud specialist Versent for $267.5 million in October 2023. Gilbert + Tobin acts for Telstra and Allens for Boost.

• Genesis has officially hit over 50% of Pacific Smiles, thanks to HBF Health which handed over its 10.03% stake. Genesis has announced their intention to overhaul the board, nominating Michael Caristo, Chris Yoo, and Tara Hariharan as their new power players.

🏗 Sector Specific

Diggers

• With Escondida facing costly upgrades and Anglo American’s assets still in its sights, analysts say BHP will lean heavily on iron ore cash flow to fuel its copper expansion. But with Chinese demand cooling and prices forecast to drop, the miner faces tough calls on ramping up WA production and reviving its Anglo bid. Iron ore remains BHP's backbone—but for how long?

• Northern Minerals narrowly blocked the election of Enping Fu to its board, with 48% of shareholders backing him despite board concerns about the lack of info on his background. The close call comes just weeks after the Treasury flagged it could scrutinise new shareholders over suspected links to China.

• Chris Ellison’s brother weathered his own fiery AGM as investors in Resource Development Group slammed him for mismanaging its flagship mining project and pocketing $1m paychecks—despite the company’s $50m market cap and struggling share price.

Fin

• Christmas has come early for BOQ’s senior staff, but juniors might just find a bag of coal under the tree. Hundreds of junior employees will miss out on bonuses under major pay changes, while senior bankers and execs will tap into a bigger bonus pool to "align more closely with market practice”.

Tech

• After Maurice Blackburn kicked off a class action against Google last week, a second law firm is jumping on the bandwagon. Their argument? Google’s online ad dominance lets it prioritise its own interests, to the detriment of publishers and advertisers.

• Australia’s world-first under-16s social media ban is making global waves—but enforcing it will be the real challenge. No one knows exactly how this will work. VPNs are already being touted as an easy workaround, and platforms argue age checks should happen at the app store level to avoid collecting sensitive user data.

Retail

• Ready to jet-set? The ACCC has given its interim authorisation to the Virgin-Qatar cooperation agreement, allowing 28 weekly return flights between Doha and four major Aussie cities: Brisbane, Melbourne, Perth, and Sydney.

• After snapping up Australian Venue Co from KKR for $1.4bn, PAG is reportedly weighing an ASX float in 2024. PAG – the owner of Oporto Chicken, the Cheesecake Shop, and the like – has been expanding Venue Co’s portfolio, adding 2 to 3 venues a week. Venue Co runs over 200 pubs across Australia. A listing could capitalise on strong pub asset values, but comparisons to underperforming rival Endeavour pose challenges.

🧠 Word Guess

• Revealed slowly, critical to claims (9).