08/08/2000 - 22:00

Editorial

08/08/2000 - 22:00

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Will the small players be casualties of bidding war?HOSTILE bids, friendly bids and counter bids.It is takeover time and major WA players such as North Limited and Woodside Energy are the targets.

Editorial
Will the small players be casualties of bidding war?

HOSTILE bids, friendly bids and counter bids.

It is takeover time and major WA players such as North Limited and Woodside Energy are the targets.

So what does it mean for the State?

How will Rio Tinto’s $3.5 billion takeover of North affect WA – particularly the Pilbara?

There is understandable apprehension in the region. Workers and their families in the mining towns and ports are nervous.

Takeovers mean rationalisation. Services cut, jobs lost.

The industry has suffered already. There is not a lot more to cut.

Fewer people are producing more.

The takeover will reduce the number of major iron ore producers to two, resulting in less competition and less demand for suppliers.

The WA Government would surely prefer more players in the sector.

Unfortunately, the deal will also result in the loss of a second $500 million railway line to the proposed West Angelas project.

Rio seems certain to land its catch. But there is still plenty of work ahead for the mining giant.

Its bid alienated the powerful Japanese steel mills who supported Anglo American’s friendly takeover attempt.

The Japanese issued thinly-veiled threats of reprisal during the bidding war if Rio gained control of North and, with it, Robe River, 47 per cent owned by the mills.

While the mills are the world’s largest consumers of iron ore, they may find it difficult to continually ignore the world’s second biggest iron ore producer.

The takeover will provide Rio with an annual output of 92 million tonnes, 20 million tonnes more than BHP.

Commercial reality usually prevails.

Shell’s bid to increase its 36 per cent share in Woodside has been far more drawn out and appears no closer to a resolution.

Shell is reviewing ways of sweetening the offer rejected last month by Woodside.

The deals are all about dollars – big dollars.

More power for fewer people. Let’s hope the little players don’t lose out.



Revitalising the CBD

The Perth City Council is rightfully concerned about the CBD.

Its challenge is to attract locals to the area for other than employment.

It will not be an easy task.

The public is spoiled with functional, mostly modern shopping centres with excellent facilities and services.

They are convenient and usually have excellent parking facilities.

Proponents of CBD developments are confident people will return to the heart of Perth.

David Jones is investing $100 million (which may include a novel plan for a tunnel linking the store’s food hall with St George’s Terrace), Myer is building on vacant land, giant supermarket chain Woolworths is returning to the CBD and Harvey Norman is taking a bigger presence.

It is fine to provide more incentives to visit the CBD but people need to consider the option as attractive.

The city’s generally inadequate public transport system plays into the hands of local and regional shopping centres and will provide a barrier to those potential city shoppers who are not close to a public transport route (and there are many).

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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