Early this month iron ore miner Portman fell to a foreign predator in the form of US company Cleveland-Cliffs, adding to a long trend of Perth companies being acquired by interstate or overseas competitors.
Early this month iron ore miner Portman fell to a foreign predator in the form of US company Cleveland-Cliffs, adding to a long trend of Perth companies being acquired by interstate or overseas competitors.
Two more Perth companies, Foodland and JDV, are takeover targets and prime candidates to add to the trend. On the flip side there has been a dearth of Perth companies making successful corporate takeovers, but Perth companies have acquired their fair share of unlisted companies and assets.
The impact of these trends is reflected in the changing composition of the Deloitte WA Index, which tracks the performance of WA listed companies.
The first index, published in May 2001, included the likes of BankWest, Burswood, Foundation Healthcare, Bristile, Hill 50 Gold and National 1, all major Perth companies which have disappeared from the Australian Stock Exchange lists following takeovers.
Several other companies on the 2001 list, such as technology developer Intellect Holdings, engineering and construction group United, and automotive parts supplier Atkins Carlyle (Alesco) are still listed on the ASX but are run from other states.
There have been relatively few deletions from the list as a result of company failures, reflecting the buoyant state of the economy and commodity markets over this period.
The collapse of gold and tantalum miner Sons of Gwalia and plantation manager APT are notable exceptions.
Deloitte Perth partner Peter McIver said the corporate landscape in Perth had changed substantially over the past five years, noting the acquisition of many mining operations by big South African and North Amercian companies.
He said many WA companies became takeover targets after they grew to become ranked as ‘mid caps’.
Perth companies seeking to redress the acquisition imbalance include Alinta, investment manager Great Southern Plantations and Internet services firm iiNet.
But in contrast to the heady days of the 1980s, when Perth entrepreneurs launched on-market takeovers, the focus has shifted to unlisted assets.
Alinta has completed three major acquisitions during the past two years, most recently participating in the purchase of the Dampier-to-Bunbury natural gas pipeline.
Great Southern is expanding its suite of investment projects, currently bidding to acquire Northern Territory company Sylvatech.
iiNet has completed numerous small acquisitions over the past two years and recently completed by far its biggest deal when it bought Internet service provider OzEmail from US company MCI.
Apart from this group, Foodland was one of the last Perth companies to make an acquisition (Progressive Enterprises) that transformed its business.
Another transforming takeover was Wesfarmers’ acquisition of the Howard Smith hardware business, in 2001. Integration of the Howard Smith business with Bunnings became the engine room of Wesfarmers’ growth.
