Macquarie Asset Management has made an $11.6 billion bid for logistics group Qube, sending its share price up 19 per cent. The $5.20 a share indicative offer is about a 28 per cent premium to Qube’s closing price on Friday. Qube is the country’s largest logistics group, operating across Australia, New Zealand and Asia. It also has a 50 per cent share of Patrick’s container terminals. Meanwhile, for a couple of hours yesterday morning, it sounded like BHP was making another bid for Anglo American, the mining company that rebuffed the Big Australia’s $75 billion offer last year. But it wasn’t to be. Ahead of the market opening yesterday, BHP put out a statement saying: “Following preliminary discussions with the board of Anglo American, BHP confirms that it is no longer considering a combination of the two companies.”
The S&P/ASX 200 closed up 1.3 per cent to 8525 points. It was a widespread rally. The industrials, tech, property, healthcare and utilities sub-indices were all up two per cent or more. Only the energy index went backwards.
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Fear-o-meter
The $11.6 billion bid for logistics group Qube, by Macquarie Asset Management (MAM), highlights that M&A activity is playing out in the background of public markets.
There have been a bunch of deals in the resources sector, notably gold, plus a few outside mining, such as US-group CoStar buying Domain, and PE groups EQT and CVC bidding for AUB Group. Who else is in line?
According to Macquarie’s equity team (which is distinct from MAM) quite a few beaten up stocks could look attractive to buyers. And some are well known names.
Pizza chain operator Domino’s, Dan Murphy’s owner Endeavour Group, language testing company IDP Education, poultry producer Inghams and Smiggle owner Premier Investments, all make Macquarie’s list of potentially attractive take-over targets.
The list is based on valuations as well as market noise. Macquarie did the same process five years ago and made a list and almost half of those companies have been involved in some sort of M&A activity.
2026 might be a busy year for investment bankers and corporate lawyers.
Fear & Greed Q+A today
On investing in a volatile market, and a couple of stocks he's watching including Domino's - a "shadow of its former self."
"There's a bit going on with Domino's. I think the biggest one weighing on it at the moment is the cyclicality... the macro is clearly hurting them right now. We're still recovering from a very, very tough period for retailers, fast food retailers, discretionary retailers more broadly with rate cuts and high inflation. That's affecting our entire fast food, quick service restaurant coverage... We think that should improve over the next year as we continue to see the effects of those rate cuts and pulling back inflation that should bode very well.
And on top of that, they've also got the sort of more idiosyncratic challenges that they've created for themselves in a way by over-expanding, particularly during COVID, where they probably misread the durability of, you know, staying at home and eating pizza. When that changed, they'd expanded too broadly and it became sprawling. Their pricing strategy got sort of bungled and now they're reigning that back in. But what you have to assume today to get to the current share price is basically no new stores, no more margin expansion. We think that's very pessimistic. And so the margin of safety for us is absolutely there right now in Domino's."
*General information only. Seek qualified advice and do your own research before making investment decisions.
