Seven Group Buys Out Coates Hire

It’s been talked about for years, mentioned for months and then negotiated for almost as long – or so it seems from the numbers of reports to that effect – we are talking about Kerry Stokes’ key company, Seven Group Holdings finally buying the 53% of Coates Hire it didn’t own from Carlyle Group and others for $517 million.

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The Curious Case Of Seven Group Holdings

At the beginning of this month, Seven West Media (ASX: SWM) announced its full year financial results which fell short of market expectations. In addition, earnings guidance for the next financial year were also below expectations. In a brutal two-day period following the announcement of its results, Seven West Media’s share price declined by 28 per cent. In dollar terms, more than $400 million was wiped off the value of the company.

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SVW – Macquarie rates the stock as Neutral

WesTrac is making large staff reductions with a further 630 positions to go on top of the recent 375 position reduction in NSW. Macquarie sees a double impact on WesTrac from the recent cut-backs from miners. Firstly, there’s the obvious reduction in new equipment sales and then there’s the effect on product support as customers move from preventative maintenance to breakdown maintenance.

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SVW – CIMB Securities rates the stock as Outperform

Target $8.60 (was $10.65). Discussing the recent trading update, CIMB was a little worried about the disproportionately weaker NSW coal market, with falling equipment sales also being compounded by increasingly tight miners when it comes to maintenance spend. While the broker expects the pace to pick back up and the current deferral trend to unwind, any sort of near-term rebound is highly unlikely.

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