☕️ Grizzly business

Good morning.

Canberra outfit Electro Optic Systems, DroneShield’s smaller rival, was functionally insolvent three years ago. It's now a $2 billion laser-gun maker up 700% in twelve months, which is exactly the kind of trajectory that gets New York short sellers interested.

As Capital Brief's Hugo Mathers reports, both short sellers and investors have questions worth asking.

Days after rebutting a short report from Grizzly Research, EOS CEO Andreas Schwer sat down with a room of about a dozen investors. Wilson Asset Management's Shaun Weick asked him straight whether the USD80 million South Korean contract would actually close. Schwer's answer, by Weick's account, "felt 50/50”.

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Market movers

Shares in Magellan Financial Group surged over 9% on Friday after the Lowy family's investment vehicle Oryxium became a substantial shareholder with a 5.1% stake, lending the weight of one of Australia's most prominent business dynasties to a turnaround story that also includes a proposed merger with boutique investment bank Barrenjoey and an accompanying $130 million equity raise announced earlier in the week.

The quick sync

• Australian longevity startup TMRW raised $7m and struck an exclusive local deal with US epigenetic testing leader TruDiagnostic to expand its precision medicine platform. (Capital Brief)

• Raising taxes on property investment risks deepening a supply crisis already falling well short of Labor's own housing targets, Andrew Bragg writes. (Capital Brief)

• How badly the Iran war hurts Australia's economy hinges on one thing: how long the oil supply disruptions last. (Capital Brief)

• Use of AI in the Iran bombardment and US plans to licence chip exports globally make clear that AI is now an instrument of geopolitical power, with unresolved consequences for Australia. (Capital Brief)

• One Nation's imminent candidate selection puts it well ahead of rivals as the 9 May Farrer by-election shapes as a defining test for Australian conservatives. (Capital Brief)

• The minerals and defence deal is the headline, but Carney and Albanese's shared vision for middle powers in a world reshaped by predatory ‘hegemons’ may matter more. (Capital Brief)

Trading floor

M&A

• AI’s story is about power: Anthropic lost a Pentagon deal over ethical limits on Claude. (Capital Brief)

• Grant Thornton US in talks to buy Grant Thornton Australia. (AFR)

• TPG pauses Greencross $700m IPO, explores sale to Coles amid market doubts. (The Australian)

• Electro Optic Systems (EOS) soars 700% but short-seller doubts its $120m South Korea deal. (Capital Brief)

• EQT considers sale of $1b Levande retirement villages amid strong market demand. (The Australian)

• Magellan-Barrenjoey merger nets staff over $1b in paper wealth. (AFR)

• Rio Tinto suspends titanium asset sale amid Iran war, continues borates divestment. (The Australian)

Capital Markets

• ASIC seeks to wind up Liberty Bell Bay for failing to file annual reports. (Capital Brief)

• NexGen Energy wins approval to build the Rook I uranium project in Canada. (Capital Brief)

• Sanjeev Gupta blocked as Tahmoor coal mine enters liquidation. (AFR)

• Lowy Family becomes a major shareholder in Magellan Financial Group. (Capital Brief)

• Oracle and OpenAI scrap Texas AI data centre expansion, Meta may step in. (AFR)

• ACCC monitors Australian fuel prices to prevent price gouging. (Capital Brief)

• Richard White-backed Vinyl Group snaps up 50 media outlets in aggressive expansion. (AFR)

• Australia and Canada deepen strategic ties as middle powers amid global tensions. (Capital Brief)

• FDC Construction & Fitout plans IPO, hires UBS and MA Moelis. (AFR)

• Deep Yellow shares drop after posting a $7.78m half-year loss. (Capital Brief)

• Oaktree preps US investors as AZ NGA maps long-term exit. (AFR)

• Pengana International Equities denies approved changes to portfolio management. (Capital Brief)

• Coles denies knowing MA Services guards were underpaid; UWU calls for sector review. (AFR)

• Australia’s housing crisis is a supply issue, and higher housing taxes may worsen it. (Capital Brief)

• David Jones extends concession payment terms amid transformation, raising supplier concerns. (The Australian)

• L1 Capital seeks cornerstones for a gold LIC raise above $400m. (AFR)

• DigiCo, EBOS and Catapult Sport dropped from ASX 200. (Capital Brief)

• Koala secures cornerstones, set for 2026 IPO launch. (AFR)

• Airwallex launches US treasury product Yield, reaching $1.42b AUM. (Capital Brief)

• Santos launches $6b Barossa LNG project after years of hurdles. (AFR)

• RBA’s Hauser says US dollar still retains safe-haven status. (Capital Brief)

• Oil market prepares for USD100 a barrel as Middle East producers cut output. (FT)(Reuters)(Bloomberg)

VC 

• TMRW raises $7m seed round and partners with TruDiagnostic. (Capital Brief)

• Eucalyptus co-founder’s Co Ventures raises $15m for pre-seed startups. (AFR)

• Betashares leads funding round for ex-NAB execs’ stablecoin startup Macropod. (AFR)

People moves

• Oracle will lay off thousands of employees while expanding its AI data centres. (Capital Brief)

• Shiv Gupta named head of Brookfield’s Australia private equity. (AFR)

• Litecard appoints PAS Group founder Eric Morris as chairman. (Capital Brief)

• Nicholas Pappas appointed chair of SBS. (Capital Brief)

• US sheds 92,000 jobs in February, unemployment rises to 4.4%. (Capital Brief)

The watercooler