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Corporate Advisory and Institutional Stockbroking Group |
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The objective of the Corporate Advisory and Institutional Stockbroking Group is to deliver a comprehensive, relationship-based service for its clients. The Group brings together the Bank’s mergers and acquisitions, equity capital markets, institutional stockbroking, corporate equity sales and equities research teams. |
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Revenue growth was recorded for the Group as a whole despite a fall in Australian equity issuance and soft equity markets generally. Growth was particularly strong in the Mergers and Acquisitions (M&A) Division. |
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The Group continues to be recognised as a leading provider of investment banking services and ranks high in all independent league tables and market share rankings across the full range of services offered. |
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Mergers and Acquisitions provides strategic advice to corporate and public sector clients on takeover advice, M&A, divestments, privatisations, corporate restructuring and other strategic and financial services. |
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The success of the Division was measured by consistent rankings in independent surveys. It was the only team to rank in Thomson Financial’s top five for Australia in each of the past five years, and in calendar 2000 it was ranked first among investment banks by number of deals completed and third by value of deals completed. In the year ending 31 March 2001 the team advised more than 120 clients on 150 mandates worldwide and completed transactions worth approximately $17 billion. |
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Equity Capital Markets advises on, manages and underwrites the full range of equity capital market products, including initial public offers, rights issues, selldowns, placements, buy-backs and issuance of hybrid securities. It also advises on capital management, convertible and hybrid structuring and issuance through its Capital Structuring team. |
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The Division continued to improve its position in the market. In calendar 2000 it was ranked second by number of deals completed and second by value of deals completed in the Thomson Financial equity capital markets league tables. In the year ending 31 March 2001 it completed 19 transactions and raised approximately $3 billion for its clients. |
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Macquarie Equities Limited provides a full range of institutional and corporate stockbroking services to local and international investors, with activities in London, Munich, New York, Hong Kong, Singapore, Auckland and Wellington, as well as throughout Australia. The Division provides a unique international service specialising in Australian stocks and selected international stocks and sectors. |
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The Division enjoyed a number of highlights. |
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In its survey of the Top Tier Investors, the 2000 Greenwich Quality Index ranked the Division number one for executions and in the top three for research sales, in terms of value add. |
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The Corporate Stockbroking team extended its services, providing a high level of daily research and market intelligence to corporate clients. |
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International expansion continued, with a new office in Wellington, which has already achieved a pleasing market share. |
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The highly rated Quantitative Research and Sales team expanded into developed markets across South East Asia while maintaining a leading position domestically. |
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Macquarie Research Equities offers extensive research of Australian and New Zealand stocks, with analysis across more than 240 companies, or 96 per cent of the combined market. The Division services 4,000-plus institutional analysts and corporate personnel worldwide. It produces more than 1,000 daily articles and 300 specialist reports each year. |
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The Division performed well in the 2000 Greenwich survey. It was ranked equal first among leading institutional investors for investment ideas and achieved a top-five overall ranking. |
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The Division added analysts in New York, London and Hong Kong to cover international developments in financial services, telecommunications and media, infrastructure and basic industries, and also established a New Zealand team. |
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The Group is organised into cross-Divisional teams to focus on target industries and clients. The industry teams focus on resources, tmet (telecommunications, media, e-commerce, technology), financial institutions, consumer products, basic industries, property, infrastructure and utilities and emerging leaders. |
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The Resources team typifies the strategy of providing niche services internationally and focusing on opportunities where Macquarie can add sustainable value over the long term. The Resources team continued its expansion in North America during the year and will explore further opportunities in European markets during 2001. In M&A the team maintained its number one ranking for completed Australian Resource M&A deals and number two ranking for completed Global Mining M&A deals (Thomson Financial 2000). |
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Major transactions included: |
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advising Rio Tinto on its $3.5 billion takeover of North. The Institutional Stockbroking team was instrumental in this transaction, completing one of the largest hostile pre-bid stakes in the domestic market by acquiring 15% of North for Rio Tinto. The deal was recognised by INSTO magazine as M&A Deal of the Year 2000 |
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advising Coal and Allied Industries on its $1 billion purchase of Peabody’s Australian coal assets |
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advising QCT on its $1.3 billion defence of the bid by BHP/Mitsubishi. |
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The Telecommunications, Media, e-commerce and Technology team was very active, with significant transactions executed in Australia, New Zealand and Asia. These included: |
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acting as Joint Lead Manager in the partial divestment of Village Roadshow’s radio business, Austereo, through an IPO. This significant transaction, the largest Australian IPO for 2001 at this stage, reinforced Macquarie’s global equity distribution capacity |
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advising Telecom New Zealand on its successful takeover bid for AAPT |
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acting for TARBS on the sale of MMDS spectrum to Austar. |
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The Group’s other industry teams were involved in the following highlight transactions: |
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acting as Joint Global Co-ordinator in the listing of NRMA, which provided NRMA Insurance with a market capitalisation of more than $4 billion on listing. The NRMA demutualisation was a landmark Australian transaction and the largest of its type in the Southern Hemisphere. Its successful completion relied on a coordinated effort across the Group |
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developing the reset preference share structure (RePS™) and leading the first issue for Bank of Queensland with its $40 million RePS™ issue |
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acting as Joint Lead Manager and Underwriter in the successful $700 million issue of reset preference shares (ReCAP) by Coles Myer, which was named INSTO magazine’s Innovative Deal of the Year 2000 |
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advising Smorgon Steel on its innovative takeover bid for Email. This involved introducing OneSteel as a joint bidder and eliminating divestment risk on the sale of Email’s major appliances business to AB Electrolux |
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advising Southcorp on its recent $1.5 billion acquisition of Rosemount Estates. The transaction was well received by the market and contributed to a substantial re-rating of Southcorp’s shares. It was awarded M&A Deal of the First Quarter 2001 by INSTO magazine. |
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Outlook |
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The Group has begun the year strongly with a number of significant advisory and equity market transactions in progress. These included advising The Coca-Cola Company on its acquisition, in conjunction with San Miguel, of the Philippines bottling operations of Coca-Cola Amatil and advising Brambles on the proposed $20 billion dual-listed companies merger with GKN’s support services businesses. |
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As many sectors of the market continue to consolidate and focus on core activities, strong corporate activity – particularly in M&A – is expected. This positive impact on the Group’s business may be partly offset by the impact of uncertainty in world equity markets. |
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The Group’s demonstrated expertise and comprehensive range of services is expected to be extended internationally during the year. Potential initiatives include expanding the Group’s corporate and research activities, particularly in the resources sector in Europe and the telecommunications and financial institutions sectors in Asia. The merger of the Group with the Asset and Infrastructure Group to form the new Investment Banking Group will facilitate these initiatives and enhance the Group’s ability to service its client base. |
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