Tinkler bids for Whitehaven while Seven West calls for cash

ASX rises 0.6% on the back of strong Wall Street leads

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published July 16, 2012 5:44 pm AEST

The S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO) closed up 22.9 points, to 4,105.1, a rise of 0.6%, following strong leads from Wall Street on Friday. Resources sectors led the way with gold rising 2%, and the energy and materials sectors both adding 1.2% as China's GDP continues to grow, but at a slower pace.

The major news of the day was predicted by many. Seven West Media (ASX: SWM) announced a $440m capital raising, offering shareholders one share for every two they hold at $1.32 each. The funds raised will go towards repaying some of the debt the company carries.

Company news

Whitehaven Coal (ASX: WHC) shares jumped 18% and closed at $4.07, after the Tinkler Group, led by mining magnate, Nathan Tinkler, bid $5.20 cash for each share in the company, valuing Whitehaven at $5.3 billion. If you were wondering why there's a big discount between the offer and closing prices is because it's conditional on the Tinkler group securing funding and the due diligence process. Investors appear doubtful that the debt funding will eventuate.

Retail Food Group (ASX: RFG) looks like it has dodged a bullet, with news that the ACCC has accepted the company's apology and the offering of a court enforceable undertaking that the company and its franchisees will not engage in similar conduct in future. The company got into strife after its Brumbys chain suggested its franchisees blame the carbon tax for price rises, and Retail Food was facing a potential $1m fine.

In more 'food' related news, Patties Foods Limited (ASX: PFG) has announced that it expects full year profit to increase by as much as 7%, despite margin pressure from the big supermarket retailers. Despite the positive news, the stock ended in the red, down 1.3%.

Gerard Lighting Group (ASX: GLG) has been placed in a trading halt – pending the release of a possible strategic transaction. Interestingly enough, shares in the company jumped 7.3% before trading in the stock was halted.

Winners and losers

Of the majors, QBE Insurance (ASX: QBE) jumped 3%, while Newcrest Mining (ASX: NCM), Wesfarmers Limited (ASX: WES) and AMP Limited (ASX: AMP) all showed greater than 1% gains.

National Australia Bank (ASX: NAB) and Telstra Corporation Limited (ASX: TLS) were amongst the losers, both down 0.3%.

Foolish Takeaway

Despite strong leads from the US on Friday, and a strong start in morning traded, our markets weakened as the day went on but still managed to hold onto at least some of the gains today. Investors were likely cautious, as they await the RBA minutes, due out tomorrow.

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Motley Fool writer/analyst Mike King owns shares in QBE. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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