Big pay day gets bigger for classy hooker Phil Kearns

As Wallabies captain, Phil Kearns learnt to lead by example and it is a lesson he has taken to his latest gig at Centric Wealth, which is the subject of a $130 million takeover offer from rival wealth advisory group Findex.
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The former hooker owns 27.6 million shares worth a tidy $2.46 million under the terms of the takeover offer.

Bid documents indicate that Kearns would have paid about $550,000 for the stock when he joined in December 2011 under its management incentive plan at the time.

But it is not the only big pay day for Kearns.

The Bid Implementation Agreement contains provisions allowing Centric Wealth to pay ”bonuses to management up to an aggregate amount of $3,679,714”.

Centric was a bit shy about explaining exactly how that little pile of wealth will be spread.Mateship matters

The recent Senate hearings on ASIC revealed the corporate pup tapped the services of stockbroker Harold Shapiro as its external adviser on the controversial David Jones share trades. It led CBD to wonder, how does one become an external adviser on such a high-profile investigation?

Familiarity with ASIC chairman Greg Medcraft may help it seems.

Medcraft and Shapiro’s wife, Isabelle, would be on very familiar terms, having shared the halls of Sydney’s Woollahra Council.

Both have been councillors and worn the mayoral robes at various times since the late ’90s.

In fact, Medcraft was polishing his ”champion of the underdog” credentials as Woollahra’s mayor in 1997 when he was justifying a multimillion-dollar upgrade to the heritage building.

Despite the harbour views, he described conditions inside the building as ”Dickensian”.

”I don’t think people understand that our staff handle over 1000 telephone calls a day and in some areas are forced to share desks,” he said.

But it was his corporate, not council, skills that won him the job at ASIC, as Medcraft told Fairfax in 2011.

”I understand business, I understand markets – I’m really well equipped for this.”

Medcraft may have even been able to help Shapiro with a bit of DJs corporate history.

In a previous corporate life he helped put together the securitisation of the David Jones credit card portfolio.iSelect upstage

iSelect’s bad run of luck continued last week with British rival Comparethemarket南京夜网.au gatecrashing its results announcement with the news it had signed up Bupa as a client.

iSelect shares tanked about 10 per cent on the news and are barely keeping above the $1 mark. Great news for investors who coughed up $215 million at $1.85 a share in last year’s float.

Not that the competition was completely to blame.

As Credit Suisse analysts said, ”the problem with iSelect is that while the story still seems to stack up … earnings growth is not what we would have hoped”.

At least it deflected interest from some other interesting titbits in the accounts such as the payout to former chief executive Matt McCann. He left just months after the IPO following a disagreement with the board on strategy.

Notes to the iSelect accounts reveal the company paid $814,000 to dispense with his services, with $532,000 described as ”cash remuneration expense and on-cost” and $114,000 in ”share-based payments”.Turnbull hiccup

The Minister for Malcolm, Malcolm Turnbull, found himself in a bit of hot water following his speech on Friday launching Morry Schwartz’s print venture, The Saturday Paper.

The Communications Minister praised Schwartz’s contribution to Australia’s ”intellectual life” and spiced things up with the comment: ”You are not some demented plutocrat pouring more and more money into a loss-making venture that is just going to peddle your opinions.”

Hmmm, now who could he have been referring to?

After mulling things over for most of the weekend, maybe a few Coalition heavies reminded him which party he belonged to and Turnbull posted a blog clarifying his comments. ”Given that earlier in my speech I had referred to William Randolph Hearst (immortalised by Orson Welles in Citizen Kane) I was surprised that some people have inferred I was referring to Rupert Murdoch,” he blogged.

”Rupert Murdoch has been publishing newspapers, including today some of the world’s most influential such as The Wall Street Journal,The Times of London and The Australian, for more than 60 years. And they have been and remain profitable. Far from being a rich man, like Hearst and many others, who makes his money in some other area and then chooses to start a newspaper to promote his own political views, Rupert Murdoch started off as a newspaper man, the son of a newspaper man, and remains a newspaper man.”

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Australia Post head Ahmed Fahour calls time at Rip Curl

Australia Post boss Ahmed Fahour has stepped down as chairman and a director of surfwear company Rip Curl, giving the former banker more time to ponder the possible $4 billion privatisation of the mail carrier as the federal government frantically searches for funds to repair its budget bottom line.
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In a letter sent to Rip Curl staff, and obtained by BusinessDay, Mr Fahour said he had enjoyed his 10 years with the Torquay-based surf outfitter but that good corporate governance and his other significant business commitments meant it was the right time ”to move on”.

”In the corporate world, a term of 10 years by an independent director/chairman is generally considered a maximum under good corporate governance rules.”

Mr Fahour said he would remain a shareholder in the privately owned Rip Curl, and it is believed his personal stake is worth about $2.5 million.

Rip Curl, which is controlled by founders Doug Warbrick and Brian Singer who jointly own 72 per cent of the company, last year abandoned a planned $400 million sale due to tough market conditions that crimped earnings. This led to a restructuring that has recently returned the surfwear group to profitability.

”With the onset of the global financial crisis, recent years have proven challenging, but I am proud of having helped the company through this period and am very pleased with the state of the business and its standing at this point,” Mr Fahour said in his letter to staff.

Rip Curl posted an after-tax profit of $14.12 million for fiscal 2013 and has certainly fared better than rivals such as Billabong, which has had billions of dollars in losses and been taken over by private equity.

”Unlike most of our competitors, we have come through the GFC in a strong position, we have shored up our financial base (without having to resort to dilutive or costly and restrictive measures) and are currently achieving excellent results,” Mr Fahour wrote.

”There is an experienced, solid and committed management team in place to take advantage of our current strong brand position and solid financial platform.”

He also paid respect to Rip Curl’s two founders and former chairman, the late James Strong.

”I am grateful to the founders who back in 2004 along with my good friend, former chairman the late James Strong gave me an opportunity to learn and start my own search with Rip Curl.”

In September last year Mr Warbrick and Mr Singer stepped down from the global retail brand, ending a 44-year association with the group that had started in a garage and on a pre-World War II sewing machine.

Mr Fahour, a one-time aspirant for the top job at National Australia Bank, also said he would be available for support and help to remaining Rip Curl directors and senior managers. He ended his letter ”kindest regards and keep searching”.

With his corporate diary now a little more flexible Mr Fahour will have more time to guide continued restructuring of Australia Post and deal with politicians and advisers tinkering with the idea of privatising the government entity.

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Warren Buffett hints at more Heinz-style deals

The challenge looming over Warren Buffett is whether Berkshire Hathaway, the vast business empire he has built over five decades, can continue to make the sort of large acquisitions that will help it grow at a pace to sustain his reputation as America’s shrewdest investor.
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But Mr Buffett, in Berkshire’s annual report released early on Sunday, highlighted the large deals his company made last year, including acquiring H.J. Heinz – and strongly hinted at how future big purchases might take place.

”With the Heinz purchase, moreover, we created a partnership template that may be used by Berkshire in future acquisitions of size,” Mr Buffett said.

Last year, Berkshire’s energy subsidiary, MidAmerican Energy, bought NV Energy for $US5.6 billion. ”NV Energy will not be MidAmerican’s last major acquisition,” he said.

Jeff Matthews, a hedge fund manager who has written books on Berkshire, said he detected a strong desire for more acquisitions. ”I think it’s way more than a hint,” Mr Matthews said in an email. ”He clearly sees more deals at MidAmerican.”

Every year, Berkshire’s annual reports are devoured as avidly as best-selling novels. The main attraction is Mr Buffett’s letter to shareholders, in which he often extols America as a breeding ground for rags-to-riches success and tells how he came to make certain investment decisions, using plain English and the odd dash of homespun humour along the way.

”Mrs B was 89 at the time and worked until 103 – definitely my kind of woman,” Mr Buffett wrote in this year’s letter, describing the now-dead Rose Blumkin, whose family owned Nebraska Furniture Mart, a retailer that Berkshire bought in 1983.

The praise for working to a late age suggests that Mr Buffett, 83, is not about to retire. Still, that will not have stopped Berkshire’s shareholders, and many others, from scouring the report for clues about a successor to run Berkshire’s operations. Two years ago Mr Buffett said that his successor had already been selected.

As he has done in past years, Mr Buffett heaped praise on Ajit Jain, head of Berkshire’s reinsurance group and the man many have speculated will take the top job.

”His operation combines capacity, speed, decisiveness and, most important, brains in a manner unique in the insurance business,” Mr Buffett said of Mr Jain.

A rising stockmarket and strong earnings from its companies helped Berkshire report record profit in 2013 of $US19.5 billion ($21.8 billion), a 32 per cent rise from $US14.8 billion in 2012. Mr Buffett has long used book value per share – a measure of Berkshire’s net worth belonging to shareholders – to assess its performance. It rose 18.2 per cent in 2013, much less than the 32.4 per cent rise in the Standard & Poor’s 500-stock index.

”As I’ve long told you, Berkshire’s intrinsic value far exceeds its book value,” Mr Buffett said.

Even though the stockmarket is trading at highs, he did not contend that stocks were overvalued, as he has in past annual reports.

One way for Berkshire to grow is to make more acquisitions. But, as Berkshire grows, the acquisitions also must be sizeable to make a noticeable difference to the company’s overall earnings.

The Heinz deal showed how Berkshire could make a substantial deal while sharing some of the financial burden. Berkshire bought Heinz in partnership with 3G Capital, an investment company led by Mr Buffett’s friend Jorge Paulo Lemann. The team-up could allow Berkshire to buy more of Heinz.

Writing about the company, Mr Buffett said: ”Certain 3G investors may sell some or all of their shares in the future, and we might increase our ownership at such times.” However, he offered few details about how Heinz was performing, except to say its 2014 earnings would be ”substantial”.

Berkshire can also grow by acquiring stakes in public companies it does not control. Its 15 largest stakes in such companies, which include Wells Fargo and Coca-Cola, are worth $US98 billion.

Mr Buffett’s annual letters are well read because they make investing seem simple, often using down-home anecdotes.

New York Times

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Chinese auction house raises $US331m in Hong Kong

Poly Culture Group Corporation, a state-backed company that operates one of China’s biggest auction houses, raised $US331 million in an initial public offering in Hong Kong on Friday, according to people close to the deal.
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The offering bolstered the prospects of Poly Culture’s auction business in China, the world’s fastest-growing art market, and allows the company to expand its cinema, theatre and performance hall operations.

Poly Culture, which is based in Beijing, sold more than 70 million shares to the public, pricing them at $HK33 ($A4.76) a share, the top of the range set by the company’s bankers, indicating strong investor demand.

Shares in the company will begin trading in Hong Kong this week.

Poly Culture is controlled by China Poly Group Corp, a huge, state-run conglomerate that began more than 20 years ago by selling weapons to the People’s Liberation Army. In addition to military equipment, the group has diversified into sectors including property and natural resources.

Last year, the United States imposed sanctions on an affiliate, Poly Technologies, accusing it of having violated a nonproliferation policy that controls weapons traffic with Iran, Syria and North Korea.

The Poly Group moved into the art and auction business in 2005 with the establishment of Poly Auction, now the world’s third-largest auction house after Christie’s and Sotheby’s, and the main unit of Poly Culture.

In China’s fast-growing art and auction market, Poly Culture is contending with the China Guardian auction house, which was founded in the 1990s. The two companies have profited in recent years from soaring demand for Chinese antiquities, calligraphy, scrolls and contemporary Chinese art.

The Beijing-based Guardian, which is privately held, is expanding quickly with plans for new headquarters in central Beijing, a museum and a possible IPO of its own.

The rapid growth of Poly Culture’s auction arm has been driven by the boom, with record prices for works by modern artists such as Xu Beihong and Qi Baishi.

But China’s art market has been racked with fraud, forgery and bribery and it declined sharply in 2012 before recovering somewhat last year.

Auction houses have also been troubled by wealthy collectors who place winning bids for art works but then delay or fail to pay after the auction is completed.

Executives at Poly and Guardian say they have struggled to tackle the payment problems and verify the authenticity of works but that they are trying to improve their operations to compete with Christie’s and Sotheby’s, which have also entered the Chinese market.

According to Artron, a Chinese website for art news, Poly Auction was the biggest Chinese auction house in 2012, with about $US1 billion in turnover, including sales made in Hong Kong.

Citic Securities and CLSA were the lead bankers on the company’s IPO.

New York Times

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Sydney FC have no time to mope: Farina

With the Sydney derby less than a week away, Sydney FC coach Frank Farina admits there’s no time to lament the points that got away against Central Coast on Saturday.
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The Sky Blues had a prime opportunity to win their third game in a row but were instead undone with a second-half winner from Mariners striker Mitchell Duke.

Sydney had battled back to level the game at 1-1 when Richard Garcia finished smartly but would go home empty-handed despite creating plenty of chances, many of which were denied by former Sydney goalkeeper Liam Reddy.

While a win would have shot them into third, they are now sixth, barely two points clear of Wellington Phoenix with a rampaging Melbourne Heart another two points back.

But Farina says they can’t afford to dwell on what might have been, and must quickly refocus on what looms as the biggest game of their season.

“It’s disappointing but we can’t do anything about it now. We’ve go two massive couple of games coming up, and next week is the derby against Western Sydney at what is likely to be a sold-out Allianz Stadium,” he said. “It’s that business end of the season, and there’s going to be a lot more twists and turns, but we’ve got to keep fighting and hope to keep getting points.

“Every game is a huge one, not only for us but for all teams in the competition, apart from Brisbane, who are most probably sitting reasonably comfortably in their position.”

After winning the first Sydney derby at Parramatta Stadium last season, the Sky Blues have picked up just one point in their past four outings against the league’s newest club.

However, Farina believes this team has gone through enough this season to manufacture the desired result on home soil.

“Mentally, we’ve got a strong group. We wouldn’t have dug ourselves out of what was happening if we didn’t have a strong core of players in there who were experienced or could bring the rest along with them,” he said. “It’s a good atmosphere in the group, and they realise they, like everyone else, will have to work hard. There’s no magic formula for winning football games. It’s about one effort on the park and, obviously, playing well.”

Farina was hoping to grind the Mariners down on Saturday as the hosts appeared to be fatigued after playing midweek against FC Seoul in the Asian Champions League.

“In the first half, we wanted to keep possession and run them around, coming off the back of the week that they had but we didn’t do that well enough,” he said. “We kept saying: “Keep the ball, move it from side to side, make them run and make them tire in the second half But I think we turned over too much possession in the second half without any real pressure.”

While the switch to the 4-4-2 diamond has helped the side’s structure – and revitalised Alessandro Del Piero – it has opened up a question about who should partner the team’s best striker, Ranko Despotovic.

While Corey Gameiro has been holding the role of late, Farina changed the youngster at half-time and replaced him with the veteran Garcia, who scored a goal and looked lively.

“Corey wasn’t playing poorly but I just thought we needed to add something extra there,” Farina said. “Richie is very experienced in that role. He’s strong in the air as well but he’s still a little bit off 90 minutes. We weren’t holding enough possession on the ball, we were losing it, and he’s someone that can hold the ball up and give the midfield and defence time to get forward.”

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