Shares in Crown Resorts Ltd (ASX: CWN) are gaining today after news the company has rejected Blackstone Group Inc‘s (NYSE: BX) acquisition offer. At the time of writing, the Crown share price is up 0.88%, with shares in the company trading for $13.16.

While Crown has officially knocked back Blackstone, it’s still considering the merger proposal put to it by Star Entertainment Group Ltd (ASX: SGR).

The acquisition offer from Blackstone was proposed on 22 March and revised twice, with the latest revision announced last week. It would have seen Blackstone buying all shares in Crown and paying $12.35 per share.

Let’s take a look at the news driving the Crown share price today.

No deal 

According to Crown, its board unanimously agreed that the offer undervalued Crown and wasn’t in its shareholders’ best interests.

The board took into account both revisions of the offer. The first being that Blackstone could take on greater regulatory risk in exchange for faster acquisition. The second, an offer of an extra 50 cents per share more than the original offer of $11.85 per share.

Crown stated the original takeover offer was only a 19% premium on the volume-weighted average price between the release of its results from the first half of the 2021 financial year and Blackstone’s initial acquisition offer.

It also said the prices revision only represented a 4% increase on the original offer despite the S&P/ASX 200 Index (ASX: XJO) gaining 6% in the time between the initial offer and the second revision.

The offer was also rejected because of its timing. Crown stated it came at an opportune moment. Right in between the release of Crown’s loss of earnings due to COVID-19 and the enactment of its plan to pay off a significant portion of debt.

Crown has rejected Blackstone’s offer despite reports on Friday that its substantial shareholder Perpetual Investments was pushing for Crown’s board to sell the business.

Star merger still on the cards

After turning down Blackstone, Crown advised that its board still hasn’t made a decision regarding Star Entertainment’s merger proposal.

Star proposed the merger last Monday. At the time, The Motley Fool Australia reported Star believed the merger could “create a national tourism and entertainment leader with a world-class portfolio of integrated resorts”.

The merger would see Star trading 1 Crown share in for 2.68 shares in Star Entertainment.

Today, Crown announced it has requested more information from Star to help its board better understand some preliminary matters.

Crown share price snapshot

The Crown share price has performed well on the ASX this year.

Currently, the Crown share price is up 32.9% year to date and has lifted 42.4% over the last 12 months.

The company has a market capitalisation of around $8.8 billion, with approximately 677 million shares outstanding.

More reading

• The latest ASX shares that top brokers have upgraded to “buy”
• ASX 200 Weekly Wrap: After record high, ASX dips on inflation fears
• Top brokers name 3 ASX shares to buy next week
• These were the best performing ASX 200 shares last week
• Crown Resorts (ASX:CWN) share price lifts amid sell-off push

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX shares have kicked off to a positive start for the week but two stand out after brokers upgraded them to “buy” today.

The S&P/ASX 200 Index (Index:^AXJO) inched up 0.3% during lunch time trade. It’s sitting comfortably above the psychologically important 7,000 mark.

While the index has gained close to 30% over the past year, experts say it isn’t too late to join the party.

New ways to get high

One ASX share that became the latest buy idea is the Treasury Wine Estates Ltd (ASX: TWE) share price, according to Morgans.

The broker upgraded the stock to “add” from “hold” following the wine maker’s investor day presentation.

Treasury Wine outlined its growth strategy for the next five years to combat its sudden cut-off from the lucrative Chinese market.

The strategy included the formation of three new divisions: Penfolds, Treasury Americas and Treasury Premium Brands.

New strategy triggers “buy” upgrade for this ASX share

“Importantly, TWE’s FY21 trading update was better than expected despite COVID still impacting some of its higher margin channels and there have been no China sales in the 2H21 following the introduction of the tariffs on Australian wine,” said Morgans.

“We think the new divisions will allow the market to properly value the Penfolds brand and prove that the SOTP is worth more than the whole.

“The new operating model could also lead to some form of corporate activity in the future.”

Morgans’ 12-month price target on the Treasury Wine share price increased to $13 from $11.10 a share.

Winning streak lifts Crown share price

Talking about corporate activity, the Crown Resorts Ltd (ASX: CWN) share price got upgraded by JPMorgan.

However, the broker’s decision to lift the Crown share price to “overweight” from “neutral” isn’t so much due to merger and acquisition (M&A) speculation.

Takeover talks are the only thing firing up the once friendless casino operator. The Crown share price is up by around 10% due to corporate interest, which includes a merger proposal from rival Star Entertainment Group Ltd (ASX: SGR).

Who knows how this will play out? It’s usually a bad idea to buy an ASX share just for its takeover potential.

But there could actually be fundamental value in the Crown share price even after its share price run.

Property is key to broker “buy” upgrade

JPMorgan ponders on how a spin-off of Crown’s property assets could impact on the value of its shares.

Crown did contemplate such a move back in June 2016 too. The idea was to list 49% of its Australian hotels and properties in an ASX property trust, while the casino operator kept the balance.

If Crown did something similar today, it would increase the value of the Crown share price considerably.

In fact, JPMorgan upped its 12-month price target on the shares to $15 from $11 just based on the prospect of such a transaction.

The worst could be over for Crown shareholders, regardless of whether a binding takeover offer emerges.

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• ASX 200 Weekly Wrap: After record high, ASX dips on inflation fears

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Infinity Lithium Corp Ltd (ASX: INF) share price has had a disastrous start to the week.

In afternoon trade, the lithium explorer’s shares are down a massive 67% to 6.2 cents.

Why is the Infinity Lithium share price crashing lower?

The Infinity Lithium share price has been sold off today following the release of an announcement relating to its San José Lithium Project in Spain. This project is the second largest hard rock lithium deposit in Europe.

According to the update, Infinity Lithium has received notification that the Investigation Permit Valdeflorez (PIV) application has been cancelled at the San José Lithium Project. This was due to the “urban unfeasibility of the research permit.” Essentially, the project has been deemed to be too close to the local town.

The company advised that it strongly disputes the validity of the decision to cancel the application. Furthermore, following legal advice, the company has lodged an appeal of this decision.

Management explained that the company considers the Junta’s resolution to cancel the PIV to be in direct breach of the law and in contradiction of previous rulings by the Junta on the environmental and urban legality and viability of the PIV.

Though, judging by the sizeable decline in the Infinity Lithium share price today, the market doesn’t appear overly optimistic that the appeal will succeed.

Management commentary

Infinity Lithium’s CEO, Ryan Parkin, commented “The joint venture partners strongly dispute the decision and are pursuing all options to reinstate the investigation permit. The Company, in unison with our joint venture partners, are reserving all rights relating to the cancellation of the PIV and those relating to the original call for tender and subsequent award resolution, in which the regional government process was predicated on the non-existence of insurmountable legal obstacles.”

“Furthermore, the Junta’s administrative fault in the original application process led to the 2019 decision to revert the PIV into application, facilitating the pathway to this most recent decision. The Company will work with all stakeholders and aims to seek a constructive and positive resolution whether through the PIV or successive rights held by the joint venture partners,” he concluded.

More reading

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• Why the Nearmap (ASX:NEA) share price continues to sink
• Why the Anteotech (ASX:ADO) share price is soaring 10% today
• Can China really crash the iron ore price?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Two S&P/ASX 200 Index (ASX: XJO) fuel companies have been targeted by the Federal Government’s newly announced Fuel Security Package (FSP).

Both the Ampol Ltd (ASX: ALD) share price and Viva Energy Group Ltd (ASX: VEA) share price will be in focus following the news.

At the time of writing, the Ampol share price is 5% higher, trading at $27.25. The Viva Energy share price is up 5.2%, currently trading at $2.10.  

The FSP is designed to protect Australia’s two remaining oil refineries and could be worth $2 billion.

If the package passes through Parliament, it will run from 2021 until 2030.

The package comes only months after BP plc and Exxon Mobil Corporation announced they were shutting down their respective Kwinana and Altona refineries. The Kwinana Refinery closure was announced in October 2020, while Altona’s was announced in February 2021.

Let’s take a closer look at the FSP, as well as Ampol and Viva’s reactions to its announcement.  

What is the Fuel Security Package?

The FSP may see Ampol and Viva offered up to 1.8 cents per litre of fuel produced at their refineries through a Fuel Security Services Payment.

Through the FSP, the refineries will receive Government support payments if their margin of profit falls to, or becomes lower than, $10.20 per barrel of oil.

The amount of support received by the refineries depends on the amount of lost profit. It’s limited to 1.8 cents per litre of fuel, which the companies will receive if their refineries’ profit margin is equal to or less than $7.30 per barrel of oil. That would equate to $2.90 of Government funding per barrel of oil.  

ABC News reports that if both refineries are paid at the highest rate available for the course of the FSP, it will cost the Federal Government a total of $2 billion.

The Government may also provide grants of up to $125 million to each refinery. The grants would help to pay for upgrades to allow the production of ultra-low sulphur gasoline. It will also provide a variable support payment of up to $108 million each year to help them through times of low incomes.

The FSP legislation is to be introduced to Parliament in the coming weeks, with hopes the FSP will be up and running by 1 July 2021.

Reactions to the FSP

Both ASX 200 fuel companies shared their excitement over the FSP yesterday.

Ampol welcomed the news, saying it would continue operating its Lytton refinery if the funding came to fruition. However, it would only commit to keeping the Lytton refinery open until mid-2027, an operational timeframe that is a condition of receiving FSP funding. 

Viva stated it planned to participate in the funding program, saying oil refining was important to Australia’s energy security.

ABC News today quoted Prime Minister Scott Morrison as saying:

This is a key plank of our plan to secure Australia’s recovery from the pandemic and to prepare against any future crises…

Shoring up our fuel security means protecting 1,250 jobs, giving certainty to key industries, and bolstering our national security.

Energy Minister Angus Taylor added:

Supporting our refineries will ensure we have the sovereign capability needed to prepare for any event, protect families and businesses from higher prices at the bowser, and keep Australia moving as we secure our recovery from COVID-19.

Commentary from management

Viva CEO and managing director Scott Wyatt commented on the FSP, saying:

Today’s announcement by the Federal Government provides important and welcome structural support to the refining sector in Australia. The sector has faced several structural headwinds in recent years from challenged trading conditions globally, increased competition from Asian refinery imports, and the significant impacts of demand destruction from the COVID-19 pandemic in 2020. This has seen the number of refineries in Australia reduce from six in 2011, to only two continuing refineries today, leaving the country predominantly reliant on product imports from international refineries for our fuel requirements…

In FY2020, our Geelong operations had a cash-loss of over $200 million, and without the support of the Federal Government continued operations would have not been sustainable. This could have seen the loss of over 700 direct jobs, the loss of the last major manufacturing operations in Geelong, and a significant contributor to the Victorian economy.

Ampol CEO and managing director Matt Halliday also commented:

We are pleased that the governments have recognised the challenges faced by the local refining industry which includes competition from large-scale international refineries and the impacts of COVID-19.

Viva and Ampol share price snapshots

The Ampol share price needs today’s good news as it battles a tough 2021 on the ASX. Ampol shares are down 3.4% year-to-date, although they have lifted 7.7% over the last 12 months. 

The ASX has been kinder to the Viva Energy share price this year. Currently, it’s up 10.85% year to date, as well as 18.3% over the last 12 months. 

More reading

• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy
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• Why the Viva Energy (ASX:VEA) share price is in focus
• Aussie dollar shoots higher! Here are some ASX winners

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Bitcoin (CRYTPO: BTC) price remains under pressure, with the world’s biggest crypto sliding 6.1% over the past 24 hours.

One Bitcoin is currently worth US$44,858 (AU$57,510). The slide has seen Bitcoin’s market cap fall from more than US$1.1 trillion in mid-April to US$845 billion today, according to data from CoinDesk.

Let’s keep this in perspective though.

While the Bitcoin price is now down 31% from its all-time high of US$64,829 on 14 April, it’s still up 59% in 2021. And if you’d bought Bitcoin at this time last year, you’d be still be sitting on a gain of 363%.

But that’s all in the rearview now. The question investors are pondering today is, what’s next?

Should you invest 3% of your portfolio in Bitcoin?

Whenever the price of an asset slides more than 30% over a period of weeks, investors are prone to hit the sell button. But as with shares, panic selling crypto assets may not be in investors’ best interests.

Anthony Scaramucci, founder of SkyBridge Capital, remains decidedly bullish on his outlook for Bitcoin. (You may also remember Scaramucci from his 10-day role as former US President Donald Trump’s communications director.)

According to Scaramucci (quoted by Bloomberg):

As an investment adviser and someone who’s been running money for 30-plus years, it’s responsible of me to tell my clients to own 1%, 2% or 3% [in Bitcoin]… I’m not telling them you’ve got to own 100% of your net worth in it – but if we’re right, you don’t want to be missing out on this.

Scaramucci pointed out that despite the growth in altcoins, Bitcoin has maintained “its supremacy as the apex predator in digital currency”.

Joining Scaramucci’s bullish outlook is Twitter Inc. and Square Inc. CEO Jack Dorsey. Dorsey tweeted, “Bitcoin changes *everything*… for the better. And we will forever work to make bitcoin better.”

Square’s CFO, Amrita Ahuja had earlier tweeted:

Our bitcoin strategy hasn’t changed. We’re deeply committed to this community, including working towards a greener future through our Bitcoin Clean Energy Initiative. And as we shared in February, we continue to assess our bitcoin investment on an ongoing basis. Nothing new here.

Buy-the-dip forecasts for sold off cryptos

Rather than expecting a longer-term continued slide for Bitcoin, Simon Peters, crypto analyst at multi-asset investment platform eToro, believes bargain hunting crypto investors are likely to return in the next few weeks.

According to Peters:

The sell-off is being driven by a number of factors; valuations were at or near all-time highs… so there will naturally be some profit-taking, while we are also seeing a general sell-off among risk assets – such as technology stocks – as economies start to unlock post the pandemic and investors fret over potential rate rises and higher inflation.

However, for many cryptoassets such as bitcoin and ethereum, the long-term story has not changed. This emerging asset class continues to revolutionise many aspects of financial services, and while nothing goes up in a straight line, the long-term fundamentals for cryptoassets remain as solid as ever.

Taking technical analysis aboard, Peters said, “Importantly, we continue to see higher lows, as well as higher highs, for cryptoassets as more investors enter this asset class, and we do not expect that trend to change.”

In share markets, a trend of higher highs and higher lows is considered a very bullish signal. Those same trends are also closely watched in the world of cryptocurrencies.

As far as the falling Bitcoin price goes, Peters adds, “We would expect to see buyers return to bitcoin, ethereum and peers in the next few weeks to take advantage of lower prices.”

If you are tempted to go bargain hunting among the beaten-down cryptos, bear in mind their historically notorious volatility. If you can stomach that level of price swings, best of luck buying the dip!

More reading

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• Why I’m loving this ASX bank share at the moment: fundie
• ASX 200 Weekly Wrap: After record high, ASX dips on inflation fears
• Elon Musk cancels Bitcoin! Is it gold’s gain?
• Tesla stops taking Bitcoin payments over fossil fuel concerns

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin, Square, and Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Nearmap Ltd (ASX: NEA) share price is trading lower on Monday.

In early afternoon trade, the aerial imagery technology and location data company’s shares are down 3% to $1.69.

This means the Nearmap share price is down 18% over the last two weeks.

Why is the Nearmap share price under pressure again today?

Investors have been selling Nearmap’s shares today after it responded to an ASX Query this morning.

Judging by the regulator’s queries, it appears as though it was concerned with the timing of Nearmap’s guidance upgrade and litigation-related trading halt request.

Nearmap announced an increase to its FY 2021 guidance on 4 May following the market close. The next morning the Nearmap share price surged higher in response to it before being hurried into a trading halt just over an hour after trading commenced.

Unfortunately for anyone that invested during that first hour, the Nearmap share price crashed lower after returning from its trading halt.

What did Nearmap say?

The ASX asked Nearmap when it first become aware of the litigation news.

It responded: “At 9.58am AEST on Wednesday 5 May 2021, NEA’s General Counsel reviewed an email delivered at 9.55am AEST on Wednesday 5 May 2021. The email, from lawyers in the United States, attached a 96-page complaint which was filed in the United States District Court (District of Utah, Northern Division). The lawyers in the United States had received the complaint via an alert service to which they had subscribed. This was the first NEA became aware of the Information.”

After which, the company revealed that its Chairman and CEO were notified promptly.

It explained: “After NEA became aware of the Information at 9:58am AEST on 5 May 2021, NEA took steps promptly and without delay to assess whether the Information was required to be disclosed under Listing Rule 3.1. These steps included: 1. notifying the CEO and Chairman promptly and without delay of receipt of the Information; 2. reviewing and considering the Information, being the 96-page complaint raising technical legal matters relating to technical aspects of US law, which was received by NEA without any forewarning; and 3. seeking legal advice from external counsel due to the complexity of the Information.”

“At 11.01am AEST on 5 May 2021, having undertaken the above steps, NEA made an initial assessment and formed a view that the Information could potentially be material to the market price of NEA’s securities but it required more time to conclude that consideration and prepare an announcement. NEA’s CEO and Chairman determined at that time that NEA should request a trading halt to manage its disclosure obligations,” Nearmap concluded.

This explanation appears to have satisfied the ASX team, though it hasn’t been enough to stop its shares from sliding.

Is the Nearmap share price in the buy zone?

According to a note out of Morgan Stanley, its analysts believe the Nearmap share price is great value.

Following the litigation news, the broker retained its overweight rating and $3.20 price target on its shares. This implies almost 90% upside over the next 12 months.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia has recommended Nearmap Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Anteotech Ltd (ASX: ADO) shares are shooting upwards today after the company announced it has received an important manufacturing contract. At the time of writing, the Anteotech share price is trading 10% higher at 33 cents. 

Anteotech is an Australian based biotech company that aims to solve global industry problems across a number of segments. In particular, the company operates in the life sciences, diagnostics, energy and medical devices markets.

What’s driving the Anteotech share price?

The Anteotech share price is soaring today after the company released news of an important agreement with Operon. To this point, the biotech has finalised and signed a manufacturing contract for its COVID-19 antigen rapid test (ART), EuGeni, with the Spanish company.

The announcement comes after the successful completion of the technology transfer in March, which also saw the Anteotech share price jump by 15%.

Moreover, under the terms of the agreement, the companies have agreed to an exclusivity period of three years. During the period, Operon has a manufacturing capacity of 8 million complete tests per annum, giving Anteotech the capacity to fulfil the expected demand for EuGeni.

Regulatory compliance

Anteotech is now a legal manufacturer of a medical device which means the company’s quality management system (QMS) needs to be compliant with both domestic and international regulatory authorities. As such, over the next 12 months, Anteotech will submit a range of tests to the TGA, FDA and Europe’s equivalents.

Furthermore, due to the emerging need to enhance its QMS, the company will also bring forward its Eugeni tests by 3 months, while delaying its TGA submission by the same time frame. This will allow findings from the trial to be included in the TGA submission. To this point, the deferral will not hinder the current roll-out and distribution of the ART internationally.

As stated by the company:

In fact, we believe the international markets provide a much stronger opportunity. To date, a high level of enquiries for the ART have been fielded from jurisdictions in which our CE Mark is accepted or where other regulatory approvals or emergency use authorisations are required.

About the Anteotech share price

The Anteotech share price has performed remarkably over the last 12 months. It’s gained an astounding 1,400% as the company saw interest in its products increase during the global pandemic.

The company’s validation-of-saliva samples for its rapid test are currently underway. Pending analysis and results of the saliva samples, Anteotech remains on track to provide an update in June 2021.

More reading

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• The AnteoTech (ASX:ADO) share price is on watch. Here’s why.
• ASX stock of the day: AnteoTech (ASX:ADO) shares top ASX

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Threats by China’s regulators sent the iron ore price crashing, but can the Asian giant really control commodity prices?

The market doesn’t appear to believe it can. ASX iron ore shares are trading mostly higher along with the S&P/ASX 200 Index (Index:^AXJO) this morning.

But should ASX investors be worried? After all, you only need to see what happened to the A2 Milk Company Ltd (ASX: A2M) share price and Treasury Wine Estates Ltd (ASX: TWE) share price when China gets upset.

ASX mining shares staring down China

This doesn’t appear to faze the Fortescue Metals Group Limited (ASX: FMG) share price. Its shares jumped 1.1% to $23.05 at the time of writing.

The BHP Group Ltd (ASX: BHP) share price and Rio Tinto Limited (ASX: RIO) share price are also defying expectations for a weak opening today.

Blunt instruments to control commodities

This might be because most of the tools that China could use might not have a lasting impact on commodity prices.

Our biggest trading partner wants to derail the record bull run for many commodities as it sees surging prices as a threat to its growth. It doesn’t help that China has a distain for our political leaders as well.

Given this backdrop, it’s still useful to know what the Chinese could do to pour cold water on ASX mining shares.

Tightening liquidity and stimulus

UBS lists a couple of levers that Chinese authorities could pull to control commodities, but each have consequences.

China could tighten liquidity through monetary controls or curb the property market. That will lower demand for commodities, but it will also hurt its growth. Even the analysts at Bloomberg don’t think this outcome is likely.  

Other broad based tactics have unintended consequences

Another option is to encourage an increase in local supply of commodities. But this will conflict with the government’s environmental agenda, noted UBS. Furthermore, China doesn’t have iron ore resources of any significance.

The third option is for the Chinese to introduce a price ceiling. It did that for coal and it’s trying to do that for iron ore by warning steel mills and speculators to behave or else.

But history shows that artificial price caps don’t often work and the outcome from such a gamble is uncertain.

More specific control measures

There are other more specific options that China could pursue. One is to restrict steel exports. That will slow its local steel industry, and in turn, lower demand for iron ore.

“But in our view, China steel prices are being pulled up by record international steel prices (US HRC >$1,500/t) & export premiums,” said UBS.

“With restocking likely to continue to drive strong ROW [rest of world] steel demand near-term, lower China exports could see ROW steel prices lift further.”

Finally, China could sell commodities from its strategic reserves. The threat of extra supply would be enough to dissuade speculators from bidding up the price of iron ore.

However, there is debate on how long the Chinese can hold the gates with such a tactic when the global demand outlook is this positive.

More reading

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• Why our most popular ASX mining shares are set to tumble this morning
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Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Fortescue Metals Group Limited, and Rio Tinto Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The South32 Ltd (ASX: S32) share price is rising today. At the time of writing, shares in the miner are trading at $2.97 – up 1.37%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.43% higher.

The share price upswing comes after the company completed its divestment from coal mining in South Africa.

Let’s take a closer look at today’s announcement.

What’s affecting the South32 share price?

In a statement to the ASX, South32 says it is transferring its “100% shareholding in South32 SA Coal Holdings Proprietary Limited (South Africa Energy Coal) to Seriti Resources Holdings Proprietary Limited (Seriti) and two trusts for the benefit of employees and communities.” The company expects to complete the transaction by 1 June this year.

South32 says it expects to lose between US$125 million and US$175 million from the sale. Net cash balance for the group will reduce by US$180 million “to reflect the recognition of the vendor support package being provided to Seriti.”

As reported on 1 April, this support package includes a US$50 million loan facility and US$200 million over 10 years to fund rehabilitation works at the site.

Investors seemingly do not mind this incurred loss, judging by today’s South32 share price movement. The company also advised that the loss of sale will be excluded from underlying earnings in its full-year financial report for this year.

While South32 is rushing to exit the South African coal market, it is attempting to ratchet up production domestically. The mining giant is currently appealing a decision by the NSW Independent Planning Commission to reject an extension of its Dendrobium coal mine in the Illawarra.

Management commentary

South32 CEO Graham Kerr said:

When we made the decision to exit South Africa Energy Coal, we recognised the business would continue to play an important role in supplying South Africa’s energy needs for years to come.

With this in mind our vision was two-fold. First, we wanted to ensure that the business would be sustainable for the long-term, for the benefit of its employees, customers and local communities. Of equal importance was our objective for it to become a black-owned and operated business, consistent with South Africa’s transformation agenda. We believe Seriti is the right owner of South Africa Energy Coal and that the additional financial support package we have provided will underpin the future sustainability of the business.

For South32, completion of the divestment is an important milestone that will see us significantly simplify our business, reduce our capital intensity and improve our underlying operating margins. Looking forward, we remain focussed on reshaping our portfolio with a bias to the base metals important for a low carbon future by advancing our development options in North America and continuing to invest in greenfield exploration.

South32 share price snapshot

Over the past 12 months, the South32 share price has increased by around 60%. Only last week, the company hit a 52-week high of $3.09 per share.

South32 has a market capitalisation of approximately $14.1 billion.

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Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post South32 (ASX:S32) share price lifts after coal fire sale appeared first on The Motley Fool Australia.

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Shares in BPH Energy Ltd (ASX: BPH) are soaring with news of its subsidiary’s Offshore Sydney Basin gas prospect. At the time of writing, the BPH share price has gained 21.9% as shares in the company trade for 8.9 cents.

BPH’s investee company, Advent Energy Ltd, has reviewed a Geoscience Australia research report that uncovered geophysical gas indications in the basin.

The company, which has several interests including gas and oil exploration, said the basin was the closest potential new gas source to the New South Wales gas market.

BPH also advised on the potential for Advent’s Baleen Well to be used for carbon capture and storage (CCS). Let’s take a closer look at the news announced by BPH today.

Offshore Sydney Basin’s potential 

According to BPH, the Australian government agency Geoscience Australia has found a high likelihood of striking gas in Advent Energy’s Offshore Sydney Basin.

Geoscience claimed the likely presence of gas was evident from a series of pockmarks.

Advent is part of a joint venture in the promising part of the Offshore Sydney Basin, offshore license PEP-11, located off the coast of Newcastle.

The PEP-11 joint venture is between Advent and Bounty Oil & Gas NL (ASX: BUY), with 85% of the license held by Advent and 15% is held by Bounty. 

According to BPH’s release, the development of Australia’s energy resources is critical for Newcastle’s industries, job creation, and power generation.

Further, Advent and Bounty believe a gas discovery in PEP-11 would be in line with the Federal Government’s ambition to find gas supplies to help the region transition to electric power.

Carbon capture and storage

BPH also updated the market on an additional objective of Advent and Bounty’s drilling in the Baleen Well, an area in the PEP-11 licence.

According to the company, the Federal Budget includes incentives for CCS technology.

BPH has previously announced the Baleen Well program could offer CCS for the greater Sydney and Newcastle area.

If successfully implemented, the Baleen Well would be the closest point of CCS to the area, producing approximately one-third of Australia’s carbon emissions.

BPH Energy share price snapshot

The BPH Energy share price is having a ripper year on the ASX so far, with today’s news bringing its latest boost.

Currently, BPH shares have gained 120% since the start of 2021. They’ve also gained 790% over the last 12 months.

The company has a market capitalisation of around $49.5 million, with approximately 664 million shares outstanding.

More reading

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here’s why the BPH Energy (ASX:BPH) share price is up 22% today appeared first on The Motley Fool Australia.

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