☕️ Geared down

Good morning.

The budget's impact on property is moving fast. Capital Brief confirmed Westpac and Macquarie have already stopped factoring negative gearing into investor serviceability calculations, with some investors finding their borrowing capacity cut by more than a third overnight.

Meanwhile, over the weekend Sydney's preliminary auction clearance rate dropped to 49%, its worst result since COVID, the AFR reported citing Cotality initial numbers.

The legislation hasn't passed, but many are clearly betting it will.

🏆 LOI Subscriber #TBD

Market movers

Shares in Mineral Resources fell almost 8% on Friday after founder Chris Ellison sold 1.75 million shares worth $122.5 million in his first on-market disposal in nine years. The sale reduces his stake to 10.54%, and came as materials stocks were already under pressure from retreating copper and gold prices.

The quick sync

• A Senate wild card committee is about to reshape Australia's startup CGT changes. The industry is bracing. (Capital Brief)

• Economists are split on whether the federal budget helps or hinders the RBA's inflation fight. (Capital Brief)

• Former industry minister Ed Husic urges startups to trust the government will get CGT settings right. (Capital Brief)

• The budget's housing measures will barely dent prices that have quadrupled in 25 years, writes David Orsmond. (Capital Brief)

Trading floor

M&A

• Papa John’s International is attracting a stronger buyout bid after its biggest franchisee backed an Irth Capital takeover attempt. (Reuters)

• Blackstone Inc. and KKR & Co. are taking over dental firm Affordable Care after a major debt restructuring. (Bloomberg)

• Apollo Global Management’s West Technology is negotiating a sale of its remaining business as part of a wind-down strategy. (Bloomberg)

• LVMH is selling Marc Jacobs to WHP Global and G-III Apparel for USD850m. (WSJ)

• Shifting fortunes at Honda and Nissan are reviving the case for a possible tie-up between the two automakers. (Bloomberg)

• Vicinity Centres is buying Eastern Creek Quarter from Frasers Property for $400m. (Capital Brief)

• Epiris and an Oakley Capital consortium have joined the bidding process for Gamma Communications. (Bloomberg)

• Flight Centre won shareholder approval to sell its Pedal Group stake for $61.7m. (Capital Brief)

• Inpex is buying PetroChina’s stake in the Browse gas project. (The Australian)

• Pershing Square Capital Management has taken a USD2.1b stake in Microsoft, calling it a high-quality long-term investment. (Bloomberg)

• NextEra Energy is nearing a deal to buy Dominion Energy amid rising AI-driven power demand. (WSJ)

• Dilmar is the frontrunner to buy Anglo American’s Queensland coal assets in a potential USD3b deal. (The Australian)

• Pacific Equity Partners is bolstering its bid for oOh!media amid competition from a higher rival offer. (The Australian)

• The Southern Cross–Seven West merger appears to be dominated by Seven, reflected in the use of the “Seven Media Group” name. (AFR)

• Shell’s North West Shelf LNG stake sale is nearing completion, with bidders weighing uncertainty over future gas supply from the Browse project. (The Australian)

• Qscan Group is attracting competing private equity bids as its sale process nears completion. (The Australian)

Capital Markets

• Meridian Energy posted higher electricity demand and hydro storage, supported by heavy rainfall and renewable energy expansion plans. (Capital Brief)

• IREN raised USD3b through convertible notes to support international expansion and data centre growth. (Capital Brief)

• Auckland Airport saw softer long-haul travel despite slight growth in overall passenger numbers. (Capital Brief)

• Electro Optic Systems shares rose sharply after MARSS Group won major new defence contracts. (Capital Brief)

• Fletcher Building expects a $10m FY26 earnings boost from a $20m property sale. (Capital Brief)

• Stellantis and Dongfeng Motor Corporation agreed on a USD1.2b deal to build cars in China. (Reuters)

• China flags Australia beef imports nearing key tariff trigger. (Bloomberg)

• Ventia Services Group secured a $405m contract renewal with Yarra Valley Water. (Capital Brief)

• Zinc is planning a $200m raise to launch a new low-cost airline to compete with Qantas and Virgin Australia. (AFR)

• ByteDance is backing a USD3b fund led by HSG to provide liquidity for investors and retain exposure to its shares. (Bloomberg)

• Delivery Hero shares surged as breakup and restructuring expectations drove investor optimism. (Bloomberg)

• Bain Capital is raising USD1B to retain ownership of ITP Aero. (Bloomberg)

• Bain Capital closes largest Asia fund after raising USD10.5b. (FT)

• OHB SE is adding banks to its planned EUR1b IPO-style share sale. (Bloomberg)

• SpaceX is preparing to launch its long-awaited IPO, with plans to file publicly, begin marketing in early June, and potentially list around June 12. (Bloomberg)

• GenusPlus Group will not proceed with a planned equity raising after securing investor support for its MPC Kinetic acquisition. (AFR)

• Challenger Gold is planning a capital raise alongside a major board reshuffle led by Peter Marrone. (AFR)

• Tabcorp has shifted regulatory fine costs onto pubs and clubs through updated contracts. (AFR)

• Electro Optic Systems is planning a ~$150m capital raising at around $8 per share. (AFR)

• Fortitude Investment Partners is rolling up the fire services sector via a deal with FVS Services Group. (AFR)

• Hancock Prospecting will build a $1b lithium mine in WA with SQM starting in 2028. (AFR)

• Telstra is disputing spectrum pricing ahead of a key government licensing decision. (AFR)

• I-MED Radiology Network is considering IPO or sale and has named Zita Peach as its new chair. (AFR)

• Boman Group says it is struggling to find suitable Australian AI investments despite strong growth to $1b in funds under management. (AFR)

• Westpac and Macquarie Group are tightening investor lending after negative gearing changes. (Capital Brief)

• Fortescue’s $150m Indigenous heritage penalty is criticised as too weak compared to past mining controversies. (AFR)

VC 

• Jim Chalmers says startups and VC may get tailored treatment as consultation continues on CGT changes. (Capital Brief)

• Australian defence-tech startup Arkeus to expand in US after latest fund raise. (WSJ)

People moves

• James Hardie Industries added Rob Sindel to its board as an independent director. (Capital Brief)

• UBS has hired Wayne Gordon to lead advisory and sales in its Australian wealth unit. (The Australian)

• Future Fund appointed two new board members, Fiona Trafford-Walker and Adam Tindall, to strengthen its investment leadership. (Capital Brief)

• Hyundai Motor Group’s top U.S. lobbyist, Drew Ferguson, is departing after one year in the role. (Bloomberg)

• Kraken laid off 150 workers and may delay its IPO to 2027 amid AI-driven restructuring and market weakness. (Bloomberg)

• MFF Capital Investments is hiring ex-Magellan staff as it expands before merging with Barrenjoey. (AFR)

• David Russell is re-entering Australia’s renewable energy sector after previously leading a major $5b sale of Equis Energy. (AFR)

The watercooler