Ramsay soars 25% on KKR takeover bid, Travel stocks rise: ASX up 0.4% at noon

The Aussie sharemarket has advanced this morning following Wall Street’s lead. Across the sectors, health care is powering ahead, followed by consumer discretionary, while energy and materials weigh. 

Ramsay Health Care (ASX:RHC) is leading the market, soaring 24.9 per cent to $80.46 after receiving a non-binding takeover bid from a consortium of financial investors led by KKR. Under the proposal, KKR would acquire all shares in Ramsay for $88 per share. Ramsay’s board has provided the consortium with due diligence on a non-exclusive basis.

Travel stocks are on the rise, led by Corporate Travel (ASX:CTD), up 4.7 per cent to $25.63. Flight Centre (ASX:FLT) has risen 1.4 per cent to $21.66, Webjet (ASX:WEB) is up 1.4 per cent to $5.89 and Qantas (ASX:QAN) is trading 0.7 per cent higher at $5.43.

Major banks are higher, led by ANZ (ASX:ANZ) up 1 per cent to $28.03. Macquarie (ASX:MQG) has risen 0.9 per cent to $207.42, Commonwealth (ASX:CBA) is up 0.5 per cent to $107.51, National Australia Bank (ASX:NAB) is up 0.5 per cent to $33.41 and Westpac (ASX:WBC) is trading 0.2 per cent higher at $24.44.

Energy stocks have given back their gains today as Beach Energy (ASX:BPT) drops 2.4 per cent to $1.63. Woodside Petroleum (ASX:WPL) has fallen 1.6 per cent to $32.40 and Santos (ASX:STO) is trading 1.1 per cent lower at $8.23.

Heavyweight miners are lower, led by Rio Tinto (ASX:RIO) down 1.5 per cent lower to $119.84 after noting a “challenging” first quarter as it works on operational performance and workplace culture. The iron ore miner produced 71.7 million tonnes of iron ore over the quarter, down 6 per cent from the prior year period. It said full year production guidance between 320 million and 335 million tonnes remains unchanged. Meanwhile, BHP (ASX:BHP) is down 0.9 per cent to $52.71 and Fortescue Metals  (ASX:FMG) is trading 0.3 per cent lower at $21.67.

Gold stocks are also weighing, led by Evolution Mining (ASX:EVN) down 1.9 per cent to $4.59 and Northern Star (ASX:NST) down 1.7 per cent to $11.28.

At noon, the S&P/ASX 200 is 0.4 per cent or 28.7 points higher at 7593.9.

The SPI futures are pointing to a rise of 33 points.

Local economic news

ANZ and Roy Morgan’s weekly consumer confidence increased by 2.2 points to 96.8 this week after average petrol prices in Australia dropped by another 8 cents per litre last week, and are now down over 46 cents per litre to $1.66 per litre last week since peaking in mid-March at $2.13 per litre.

Consumer confidence has now increased for three straight weeks, however it is still a significant 17.2 points below the same week a year ago, April 17/18, 2021 (114.0) and is now just below the 2022 weekly average of 98.2. Consumer Confidence was up in most states this week including New South Wales, Victoria, Western Australia and South Australia.

What else to keep an eye on?

Sequoia (ASX:SEQ) has initiated coverage for Betmakers (ASX:BET) with a price target of 77 cents. Shares are trading flat at $0.64.

Morningstar has cut three companies ratings from a hold to a sell. These are Atlas Arteria (ASX:ALX), trading flat at $6.80, APA Group (ASX:APA), trading 0.8 per cent higher at $11.19 and Flight Centre (ASX:FLT), trading 1.4 per cent higher at $21.66.

In the M&A space, KKR is taking the spotlight after they have targeted Macquarie’s (ASX:MQG) India road assets and Ramsay Health Care (ASX:RHC) which has skyrocketed amid the takeover offer by KKR, valuing the company at around $20 billion as per AFR. Goldman Sach said in a note that the deal comes in at a premium compared to its $12 billion market cap and $15 billion enterprise value.

Elsewhere, Whitehaven Coal (ASX:WHC) is on track to deliver its FY22 guidance despite wet weather events and Covid-19 disruptions. During the March quarter, the coal miner’s managed run-of-mine production of 5.2Mt fell 5 per cent from the prior year period, while it achieved an average coal price of $315/t, up 212 per cent following the global response to Russia’s invasion of Ukraine. Shares are trading 0.4 per cent lower at $4.64.

Meanwhile, Nearmap (ASX:NEA) says it achieved a record quarter from its government portfolio in North America, having exceeded more than US$2 million in incremental annual contract value. CEO Rob Newman said, “Nearmap is attracting new business in North America at a record pace”. It also reaffirmed guidance for its annualised contract sales value to close FY22 at the upper end of the $150 million to $160 million guidance range. Shares are trading 0.7 per cent lower at $1.38.

Best and worst performers

The best-performing sector is health care, up 3.2 per cent. The worst-performing sector is energy, down 1.2 per cent.

The best-performing stock in the S&P/ASX 200 is Ramsay Health Care (ASX:RHC), trading 24.9 per cent higher at $80.46. It is followed by shares in Pro Medicus (ASX:PME) and Corporate Travel Management (ASX:CTD).

The worst-performing stock in the S&P/ASX 200 is AGL Energy (ASX:AGL), trading 5.8 per cent lower at $8.29. It is followed by shares in Regis Resources (ASX:RRL) and Paladin Energy (ASX:PDN).

Commodities and the dollar

Gold is trading at US$1946.30 an ounce.
Iron ore is 2.6 per cent lower at US$149.85 a ton.
Iron ore futures are pointing to a fall of 0.5 per cent.
One Australian dollar is buying 74.03 US cents