☕️ Easy exits

Good morning.

Australian venture capitalists are switching gears, embracing M&A as the preferred exit route in a tougher market.

The weak Aussie dollar has US buyers sniffing around and the local corporates are finally waking up to the idea of buying instead of building. As Investible’s Charlie Ill tells Capital Brief’s Bronwen Clune, it’s all about finding the “low-hanging fruit” to return capital to investors, with nine exits already under their belt this year.

"Historically, Australian corporates haven't been active in acquiring smaller tech companies, but that's changing. Now, we are seeing signs that they are seeking to add talent, distribution and product faster by buying innovation rather than building it in-house," Kylie Frazer, partner at Flying Fox added.

🏆 LOI Subscriber #TBD

Market movers

Premier Investments shares plunged 9% on Wednesday, erasing a chunk of its gains from the past year, after posting a nearly 5% profit drop. Solomon Lew reportedly partly pinned Smiggle's sales slump on ousted ex-boss John Cheston.

Plans to spin off Smiggle by January 2025 were shelved while Lew eyes a potential all-scrip deal to merge its apparel brands with Myer.

The quick sync

• OpenAI CTO Mira Murati departs amid plans for a major restructuring that removes non-profit control and grants CEO Sam Altman equity, marking a shift towards a for-profit structure valued at US$150 billion. (Reuters)

• Blackstone flagged it is on track to post lower profits from selling investments in the third quarter, as deal exits remained muted. (Capital Brief)

• Dentons Australasia CEO Doug Stipanicev stepped aside amid an investigation into his use of a QAnon-linked slogan at a town hall, which he claims was a reference to a 1996 sailing film. (Capital Brief)(The Australian)

• The Albanese government risks losing control of the narrative “flying the kite” on negative gearing and capital gains tax concession changes. (Capital Brief)

• Vanguard boss Salim Ramji targets “extraordinary” inefficiencies in the active fixed-income market in major push, citing lower fees opportunities and greater transparency. (FT)

• More old Wall Street offices, previously occupied by Goldman Sachs, JPMorgan, slated for apartment conversion. (Bloomberg)

• Nobel Laureate Joseph Stiglitz warns rising US-China tensions are reshaping global trade, opening opportunities while raising risks for EM if relations worsen. (Bloomberg)

Trading floor

M&A

• Rightmove has rejected REA Group's improved takeover bid as undervalued, leading REA to express disappointment and frustration over the lack of engagement. (Capital Brief)

• Roc Partners is quickly assembling a consortium to bid for chicken producer ProTen, valued at over $1bn. (AFR)

• Premier Investments saw a profit decline and will postpone the Smiggle demerger to prioritize a potential Myer apparel takeover. (Capital Brief)

• Step One Clothing founder Greg Taylor is selling $30m worth of shares at $1.70 each through Morgans, as the stock surpasses its IPO price. (AFR)

• Fortescue signed a $4.06bn deal with Liebherr to create one of the world's largest zero-emission mining fleets, the biggest contract for both firms. (Capital Brief)

• A global infrastructure investor is evaluating a possible acquisition or equity injection in Transgrid as talks of an ownership reorganization arise. (The Australian)

• Codan is acquiring Kägwerks for $33.6m to enhance its tactical communications business and gain credibility in the US military market. (Capital Brief)

• Macquarie Asset Management and Aware Super have secured a co-investor for their $6bn bid for TPG Telecom's fibre network, ahead of TPG's auction winner announcement. (AFR)

• Sigma Healthcare's profit fell sharply due to costs from its planned $8.8bn merger with Chemist Warehouse, with the ACCC's decision delayed until October 24. (Capital Brief)

• Hanwha has abandoned its $1bn bid for Austal, concluding its campaign to gain shareholder and government support. (The Australian)

• Genesis Energy shares fell after revealing plans for a strategic partnership and equity stake in EV charging network ChargeNet. (Capital Brief)

• Queensland Airports is close to finalizing the sale of a major stake, with AustralianSuper likely as the frontrunner, though it may not meet the owners' price expectations. (The Australian)

• KKR and Skip Capital have acquired a 74.25% majority stake in Queensland Airports Limited, a deal facilitated by Macquarie and Barrenjoey on behalf of State Super and Australian Retirement Trust. (AFR)

Capital Markets

• The Takeovers Panel rejected shareholders' request to delay ERA’s capital raise, clearing the way for the discounted share issue. (Capital Brief)

• Mitsui-backed Campana, which owns an undersea cable from Singapore to Bangkok, has enlisted Ord Minnett and CLSA for an ASX float, targeting a valuation of about $400m. (The Australian)

• Glenn Haifer is launching a $100m capital raise for his R&D finance firm, seeking funds from family offices and institutional debt sources. (AFR)

• Webjet Group shares rose after its ASX debut, though Citi cut its target price for Web Travel Group. (Capital Brief)

VC

• Fintech WeMoney has teamed up with Google to launch "WeMo," an AI-powered assistant designed to help Australians understand and improve their credit scores before borrowing money. (Startup Daily)

People moves

• DroneShield appointed Richard Joffe, CEO of Honey Insurance, and Simone Haslinger, former co-head of equity capital markets at JP Morgan, as independent non-executive directors. (Capital Brief)

• Jefferies has lost Australian banker Paul Griffiths to Deutsche Bank, highlighting a significant shift in its investment team. (AFR)

• Dentons appointed Amber Warren as Australian chair amid legal action over alleged Fair Work Act breaches, with former regional head Douglas Stipanicev stepping aside during an investigation. (Capital Brief)

• Magellan Financial's new CEO, Sophia Rahmani, is reshuffling leadership, prompting the exit of head of strategy, who previously managed defenses against Keybridge Capital. (AFR)

Together with Silversea

Save, indulge & explore Australia this summer

From vibrant coastal cities to the silent fjords of New Zealand, we invite you to see more of your big backyard in ultra-luxury splendour.

Book by 31 October, 2024 to enjoy savings of $5,000 per suite, plus US$600 Shipboard Credit per suite and business class flights from $498 on more than 25 selected Australia and New Zealand voyages. Find out more at Silversea.com.

The watercooler