Azzet reports on three ASX stocks with notable trading updates today.
Silk Logistics soars after ACCC clears takeover
Silk Logistics (ASX: SLH) share price was up 22% at the open after the door-to-door container logistic provider revealed that the regulator (the ACCC) will not stand in the way of plans by UAE-based multinational logistics company DP World to acquire the business for $174.5 million as announced to ASX on 11 November 2024.
Today’s ACCC decision means the company will delist from the ASX on August 7, 2025.
Despite initial vertical integration concerns, the regulator saw no issues with DP World Australia, a major container stevedore, owning a national container transport provider.
The ACCC concluded that the deal – which reflects ongoing consolidation in the container logistics sector – is unlikely to substantially lessen competition.
The ACCC found that incentives for harmful discrimination against competitors were limited, given DP World’s need to maintain terminal efficiency.
The ACCC also cleared the deal of potentially resulting in below-cost transportation prices to importers and exporters if their containers are also picked up and dropped off at DP World Australia's stevedoring terminals.
DP World services a third of the containers processed at the four ports from which it operates in Australia in Melbourne, Botany, Brisbane and Fremantle.
However, the ACCC decided not to oppose the transaction after considering detailed responses from the global group.
"Although DP World Australia may be able to engage in subtle forms of discrimination without adversely affecting its primary function as a container terminal, such conduct is unlikely to reach a level so as to substantially lessen competition," said ACCC Commissioner Philip Williams.
"DP World Australia would continue to face competition from a range of established and prospective container transport providers."
The ACCC also concluded that a reduction in DP World Australia’s ability to efficiently process containers at its terminals would risk the group losing shipping lines to other terminals, damaging its own business.
Silk Logistics' market cap is $171 million; the share price is up 68% in one year and up 40% in the last month.
The stock appears to be in a medium-term rally confirmed by multiple indicators.
Consensus is Hold, buyers outweighed sellers in morning trading.
Cleanaway up rises after ACCC clears Contract Resources acquisition
Shares in Cleanaway (ASX: CWY) were up 2% at the open after the ACCC has cleared the waste management company’s $377 million acquisition of unlisted industrial services provider Contract Resources citing low barriers to entry in the oil and gas sector.
When Cleanaway’s proposed acquisition of Contract Resources was first announced in March, management flagged $12 million in annual net costs post-merger synergies.
The acquisition is expected to be completed on 31 July.
While Cleanaway and Contract compete for the supply of industrial maintenance and cleaning services to the oil and gas sector, the ACCC concluded that the latter primarily provides specialist industrial services such as catalyst handling, which Cleanaway does not supply.
The ACCC also expects the merged entity to continue to face competition from alternative suppliers.
ACCC commissioner Philip Williams noted that the oil and gas sector's customers “are generally large, well-resourced organisations that could sponsor new entry or sponsor the expansion of existing rival suppliers”.
The competition regulator also found that it is “unlikely to be a profitable strategy” to leverage Contract Resources’ strong position in supplying specialist services by requiring its customers to contract other Cleanaway services, because there are alternative specialist providers.
Commenting on today’s update Cleanaway CEO Mark Schubert told the market that when combined with the company’s Industrial Services (IS) business, Contract Resources, Cleanaway will emerge as a leading provider of integrated, specialised technical services to customers in the oil & gas, resources and industrial sectors.
With its market-leading reputation, technical capabilities, and Tier 1 oil & gas customer base, Contract Resources enhances our value proposition and positions us to secure a greater share of DD&R projects and the complex, hazardous waste streams they generate,” said Schubert.
Today’s update follows Cleanaway's acquisition of Citywide Service Solutions (Citywide Waste).
While the company didn’t regard the announcement as price sensitive, the acquisition has expanded Cleanaway’s solid waste services business by an additional 100 fleet units and 200 staff members.
As part of the agreement, Cleanaway has also acquired Victoria’s second-largest waste transfer location, the Dynon Road Transfer Station.
The business will now invest $35 million in the station to transform it into a modern and efficient post-collection hub.
Cleanaway has a market cap of $6.2 billion; the share price is up 6.2% in one year and up around 6% year-to-date.
The stock’s shares appear to be in a near-term uptrend confirmed by its 20-day moving average.
Consensus is Strong Buy.
Monadelphous rises on $100m in new contracts
Shares in Monadelphous (ASX: MND) were up close to 2% at noon after the engineering company announced new contracts worth more than $100 million with Technip Energies relating to the hook-up and commissioning of Shell’s Crux platform off the coast of WA.
The contract with Technip Energies is for the provision of multi-disciplinary services associated with the hook up and commissioning of Shell’s Crux platform off the coast of WA and is expected to be completed late next year.
The Shell Crux facility forms part of the long-term backfill for the Prelude floating liquefied natural gas facility, around 160km away and 620km north-east of Broome.
Meanwhile, the company’s fabrication services business, Inteforge - which has been supplying packaged and modularised equipment to Origin Energy (ASX: ORG) since 2015 – (formerly Boral) has secured a two-year extension to its master goods agreement with the energy provider to continue supplying wellsite equipment for Australia Pacific LNG in Queensland.
At the half year the company announced a net profit after tax of $42.5 million (up 41.3%) on revenue of $1.051 billion.
For the for the half year ended 31 December 2024, the company had secured around $1.7 billion of new contracts across a range of sectors, including energy, iron ore, other minerals and renewable energy.
The company declared an interim dividend of 33 cents per share fully franked.
Monadelphous ended the period with a cash balance of $272.5 million.
Monadelphous has a market cap of $1.7 billion; the sharepiece is up 35% in one year and up 24% year to date.
The stock is in a strong bullish trend confirmed by multiple indicators.
Consensus is Strong Buy.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
