22/06/2004 - 22:00

Chaney proves his value

22/06/2004 - 22:00


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Imagine how many people would have laughed 10 years ago at the suggestion that, not only was a CEO from Western Australia lauded as the nation’s best, heading a company that was a market darling,

Chaney proves his value

Imagine how many people would have laughed 10 years ago at the suggestion that, not only was a CEO from Western Australia lauded as the nation’s best, heading a company that was a market darling, but that the nation’s biggest bank had asked him to help haul it out of the large corporate hole it had dug.

With the stink of WA Inc and all that 1980s-style entrepreneurial damage, it would have been hard to imagine this scenario in 1994.

Western Australia was a joke. It was viewed as corrupt, with its most high-profile corporate leaders having been unmasked as fakes and criminals.

Just being taken seriously by the big capital and investment markets of the east coast was hard enough for anyone who had survived the fallout.

In the exclusive clubs of Melbourne and Sydney, one only had to mention our State to generate sniggers of contempt.

Only the success of the West Coast Eagles helped alleviate the pain.

Amid all this, Michael Chaney was a relatively new managing director of what was still then a sleepy little Perth-based conglomerate, which had its key links in the conservative rural sector.

With that in mind, it is hard to believe that this week Mr Chaney was named as the chairman-in-waiting at the pride of corporate Melbourne, National Australia Bank.

Not only that, but the announcement of his appointment pushed the shares up significantly, adding about $675 million to shareholder value – which is not a bad start in anyone’s language.

While all this might surprise someone who’d left Australia in 1994 for a 10-year sabbatical in the outer regions of Mongolia, it should also be measured against other events.

In 1994, Mr Chaney had yet to endure years of market complaints that Wesfarmers was incapable of making acquisitions as the company competed with the corporate raiding style of Futuris, seemingly modelled on the style of Robert Holmes a Court.

It has been in the past couple of years, as the tech wreck started a much-needed shakeout of the market, that the Wesfarmers’ methodology has attracted the plaudits it deserved.

As (and I have said this before) the HIHs, One-Tels, the Southcorps and, most recently, NAB, have between them managed the full range of corporate debacles, the market has started to warm to idea that WA is not all that bad a place.

This was topped off by the Order of Australia awarded to Mr Chaney last week for his contribution to business.

Naturally, we don’t want to get too cocky here. Turn a few pages and you’ll find a local CEO, Bob Browning, who still says the east coast investment institutions don’t really like us.

And its worth remembering for every local corporate achiever trying to emulate the rigorous discipline and good governance of Wesfarmers, there’s a dozen shonky operators nailing a new name plaque to their offices in West Perth or South Perth to spruik a new deal. Apologies to legitimate operations in those areas, but experience tells me there are more white shoes there per square kilometre than anywhere between here and the Gold Coast.

As a final note we wish Mr Chaney all the best in the next instalment of his career and we hope he doesn’t succumb to the calls of Melbournites that a NAB chairman has to live there – that’s why we have aeroplanes, telephones, satellites and the Internet.

Poker faces at Burswood

The other big piece of corporate news this week – the Burswood bid – has become a delicious game of, well, poker.

The Packer-controlled Publishing and Broadcasting had its bluff called by Burswood’s board, as they had to, but the response has been so deft.

By upping the ante by just 6 cents and, rather ominously, firing its CEO Peter Yates between the first and second bids, PBL has put the pressure fairly and squarely back on the Burswood hierarchy to either put up or shut up.

If this were politics, it would be a classic John Howard wedge tactic.

Burswood shareholders now have to decide if PBL is bluffing again and, if it is, just how much it really wants the Perth casino. They also have to decide if Burswood is a good investment if the bid fails. Woodside took a long time to recover to the levels reached when Shell made its bid three years ago. And, ultimately, there was a change of management as the market (and big stakeholder Shell) digested that lost premium and weighed it up against earlier promises.


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