Latest / What the Flux / RBA hits pause on rates | Accent Group receives hostile takeover bid | Grill’d allegedly misleads customers

Transcript

RBA hits pause on rates | Accent Group receives hostile takeover bid | Grill’d allegedly misleads customers · What the Flux

• 0:05
  Speaker 1: Percy is put the flux.
• 0:06
  Speaker 2: I'm Brett and I'm justin As Wednesday, the seventeenth of June.
• 0:09
  Speaker 1: Easy Come, Easy Go, Judsey Boy. Last week we spoke
• 0:12
  Speaker 1: about Chemists Warehouse making a fourteen billion dollar play for Boots,
• 0:15
  Speaker 1: the UK pharmacy giant. Now Chemist Warehouse has pulled out
• 0:19
  Speaker 1: of these talks and its shares have jumped following this news.
• 0:22
  Speaker 2: Very much, Easy Come, easygous. It's been of a four
• 0:25
  Speaker 2: week since the federal budget was dropped, which means we've
• 0:28
  Speaker 2: all had some time to process it, and now we
• 0:30
  Speaker 2: want to get your thoughts on how it's likely to
• 0:32
  Speaker 2: interact you. In the show notes of the pod, we've
• 0:34
  Speaker 2: left a link to a two minute survey to get
• 0:36
  Speaker 2: your thoughts on the budget or we sharing the results
• 0:38
  Speaker 2: in the coming week. Plus, we're giving away three one
• 0:40
  Speaker 2: hundred dollars gift cards the three lucky respondents, So click
• 0:43
  Speaker 2: the link in the show notes your chance to win
• 0:45
  Speaker 2: and share your thoughts.
• 0:46
  Speaker 1: Three delicious stories today, Juzzy Boy, Let's do it for
• 0:49
  Speaker 1: our first. The RBA has held the cash rate at
• 0:52
  Speaker 1: four point three five percent, pausing to see if the
• 0:55
  Speaker 1: three hikes this year so far have actually made a difference.
• 0:59
  Speaker 2: Finally some relief for mortgage holders. They've be maned, so
• 1:02
  Speaker 2: tell me a bit more so.
• 1:03
  Speaker 1: The Reserve Bank of Australia is obviously Australia's central bank,
• 1:06
  Speaker 1: which means eight times per year to set the official
• 1:09
  Speaker 1: cash rate.
• 1:09
  Speaker 2: And this cash rate decision is bit. It flows into
• 1:11
  Speaker 2: everything like home loans, credit card, save his accounts across
• 1:14
  Speaker 2: the country.
• 1:15
  Speaker 1: And so far this year the RBA has been on
• 1:17
  Speaker 1: a hiking spree.
• 1:19
  Speaker 2: Yep, it's lift at the cash rate three times already.
• 1:21
  Speaker 1: And yesterday it finally stopped the pain for mortgage holders.
• 1:24
  Speaker 2: The board voted unanimously to hold the cash rate at
• 1:27
  Speaker 2: four point three five percent, even while admitting that inflation
• 1:30
  Speaker 2: is still too high.
• 1:31
  Speaker 1: The RBA's problem, jazy boy, is it's being squeezed from
• 1:35
  Speaker 1: both sides.
• 1:36
  Speaker 2: Yeah. On one side, oil prices have jumped after the
• 1:38
  Speaker 2: Middle East conflict, but it started to slow.
• 1:40
  Speaker 1: On the other hand, consumer spending is slowing down and
• 1:43
  Speaker 1: house prices are falling in some Australian capital city.
• 1:46
  Speaker 2: So me man. The RBA is essentially doing what you
• 1:48
  Speaker 2: do after three big gym sessions in a row, resting
• 1:51
  Speaker 2: to see if the gains actually kicked.
• 1:52
  Speaker 1: In and Jazi boy. This whole situation comes down to
• 1:55
  Speaker 1: a concept called the monetary policy transmission lag.
• 2:00
  Speaker 2: So what is the key learning here?
• 2:01
  Speaker 1: Raising interest rates doesn't fix inflation straight away. There's a
• 2:04
  Speaker 1: delay between pulling the lever and feeling the effect.
• 2:08
  Speaker 2: That delay is called the monetary policy transmission lag.
• 2:12
  Speaker 1: Really really rolls off the ton nicely.
• 2:14
  Speaker 2: Yeah, you see me, man. When the RBA lifts the
• 2:16
  Speaker 2: cash rate, it can take twelve to eighteen months for
• 2:19
  Speaker 2: the full effect to show.
• 2:20
  Speaker 1: Up across spending, inflation, employment data.
• 2:22
  Speaker 2: And we know the RBA is constantly managing a bit
• 2:25
  Speaker 2: of a financial tightrope.
• 2:27
  Speaker 1: Yeah. If they act too slowly, there is a risk
• 2:29
  Speaker 1: that inflation could become embedded.
• 2:31
  Speaker 2: And if they act too fast, they risk tipping the
• 2:33
  Speaker 2: economy into a recession.
• 2:34
  Speaker 1: According to the IBA, a one percentage point rise in
• 2:37
  Speaker 1: the cash rate typically reduces household consumption by about zero
• 2:40
  Speaker 1: point four percent over two years.
• 2:42
  Speaker 2: But this stul in theory and it's much harder to
• 2:45
  Speaker 2: predict in reality.
• 2:46
  Speaker 1: So far this year, the RBA has already raised rates
• 2:48
  Speaker 1: three times, so they want to see if those hikes
• 2:51
  Speaker 1: are doing the job they were meant to do before
• 2:53
  Speaker 1: making any other move.
• 2:54
  Speaker 2: For our second story. Australia's largest sneaker retailer behind Platypus
• 2:58
  Speaker 2: and athletes Foot, has received a hostile takeover bid without
• 3:01
  Speaker 2: a single cent of premium.
• 3:03
  Speaker 1: That sounds very hostile to me, a juzzy boy, Tell
• 3:05
  Speaker 1: me more.
• 3:06
  Speaker 2: Okay, So the company is called Accent Group and it's
• 3:08
  Speaker 2: Australia's largest sneaker retailer.
• 3:10
  Speaker 1: We're talking nearly nine hundred stores, including brands like Platypus,
• 3:13
  Speaker 1: Hype DC, athletes Foot.
• 3:15
  Speaker 2: Alongside the stores, they also hold the exclusive distribution rights
• 3:18
  Speaker 2: for Vans, Howkards, Doc Martins and Nude Lucy in Australia
• 3:21
  Speaker 2: and New Zealand.
• 3:22
  Speaker 1: Now Phrases Group, which is a British retailer. They already
• 3:25
  Speaker 1: own almost twenty three percent of Accent but they want
• 3:28
  Speaker 1: the rest.
• 3:28
  Speaker 2: But here's where the things get juicy, bee man. They're
• 3:30
  Speaker 2: not offering a premium to take over the.
• 3:32
  Speaker 1: Business, not one micro acent above the Friday closing price
• 3:36
  Speaker 1: of sixty five cents a share. And the reason there's
• 3:38
  Speaker 1: no premium, Phrases is angry. Yeah, they've got a list
• 3:40
  Speaker 1: of grievances, juzzy boy. They claim Accent Group has suffered
• 3:43
  Speaker 1: from mismanagement, dodgy executive pay, and a failed strategy. Day now,
• 3:48
  Speaker 1: Jaziboy Accents board told shareholders to sit tight and do
• 3:51
  Speaker 1: nothing for now.
• 3:52
  Speaker 2: But Phrases says that even if they aren't able to
• 3:54
  Speaker 2: acquire the whole company, they'd be happy with just twenty
• 3:57
  Speaker 2: six percent ownership because that's enough to install a second
• 3:59
  Speaker 2: board member and start unlacing the company strategy from the inside. Mmm.
• 4:04
  Speaker 1: Classic corporate activism.
• 4:06
  Speaker 2: So what is the key learning here?
• 4:07
  Speaker 1: A hostile takeover is when someone tries to buy a
• 4:10
  Speaker 1: company against the board's wishes.
• 4:12
  Speaker 2: And it's a very different beast to a friendly deal YEP.
• 4:14
  Speaker 1: In a friendly acquisition, the buyer approaches the board, they negotiate,
• 4:17
  Speaker 1: and everyone shakes hands and skips off into the sunset, whereas.
• 4:21
  Speaker 2: A hostile takeover skips the board entirely and goes directly
• 4:24
  Speaker 2: to shareholders. Here's cash, sell us your shares.
• 4:27
  Speaker 1: Typically, when bidders are looking to acquire another company, where
• 4:29
  Speaker 1: a hostile or not, they have to offer some sort
• 4:32
  Speaker 1: of premium.
• 4:32
  Speaker 2: For example, co Star's acquisition of Domain was it a
• 4:35
  Speaker 2: thirty five per cent premium to its pre offer trading price,
• 4:37
  Speaker 2: but Phrases, they've gone with a very different approach.
• 4:40
  Speaker 1: Yep, their betting shareholders are frustrated enough to sell at
• 4:44
  Speaker 1: the current low market price.
• 4:46
  Speaker 2: For our third and final story, Grilled is being sued
• 4:49
  Speaker 2: by the H Trible C for allegedly misleading customers about
• 4:52
  Speaker 2: how much it would donate to an environmental cause in
• 4:55
  Speaker 2: a three year promotion.
• 4:56
  Speaker 1: I'm walking to Grill thinking I'm saving the planet? Does it?
• 4:59
  Speaker 2: Boy?
• 4:59
  Speaker 1: It turns out I might just be getting a good
• 5:01
  Speaker 1: burger at dodgy marketing.
• 5:03
  Speaker 2: Tell me more. Okay. So Grilled is the Australian premium
• 5:05
  Speaker 2: burger chain that was founded back in two thousand and four.
• 5:07
  Speaker 1: It's grown to over one hundred and seventy nine stores
• 5:10
  Speaker 1: that are mostly company owned, and they man they market
• 5:13
  Speaker 1: themselves heavily on sustainability community values and it's really leaned
• 5:17
  Speaker 1: into the quote good for you, good for the planet positioning.
• 5:20
  Speaker 1: But now Grilled is in a little bit of hot
• 5:22
  Speaker 1: water with the A triple C.
• 5:23
  Speaker 2: Do not speak a bad word about the simply Grilled
• 5:25
  Speaker 2: b man. That burger has done nothing wrong.
• 5:28
  Speaker 1: That burger is completely innocent. But the issue is that
• 5:31
  Speaker 1: Grilled had a promotion called Tree Day Tuesday, which ran
• 5:34
  Speaker 1: for over three years until mid twenty twenty four.
• 5:36
  Speaker 2: If you buy a burger on a Tuesday, Griel donate
• 5:39
  Speaker 2: one dollar per burger to plant trees.
• 5:41
  Speaker 1: Now Jazi boy. Over five million burgers were sold on
• 5:43
  Speaker 1: Tuesdays during that campaign.
• 5:45
  Speaker 2: That would mean five million bucks donated to tree Day.
• 5:47
  Speaker 1: You would have thought so, except it ended up being
• 5:50
  Speaker 1: two one hundred and fifty thousand dollars.
• 5:51
  Speaker 2: The a Triple C says only four percent of the
• 5:53
  Speaker 2: purchases actually qualified for a donation under Grilled's fine prints,
• 5:57
  Speaker 2: and the agual C's suing Grilled for allegedly misleading customers
• 6:00
  Speaker 2: and greenwashing they're advertising. So what is the key learning here?
• 6:03
  Speaker 1: Consumer law doesn't only care about what your headline is.
• 6:07
  Speaker 1: It also cares about the overall impression a reasonable person
• 6:10
  Speaker 1: would walk away with from the promotion.
• 6:11
  Speaker 2: So you don't have to lie outright to actually breach
• 6:14
  Speaker 2: the Australian consumer law.
• 6:15
  Speaker 1: And this isn't just a Grilled problem. The good guys
• 6:18
  Speaker 1: got themselves into hot water for something very similar.
• 6:20
  Speaker 2: Yeah, they were ordered to pay over thirteen million bucks
• 6:23
  Speaker 2: in penalties after running over one hundred store credit promotions
• 6:26
  Speaker 2: that buried the expiring conditions deep in the terms and conditions,
• 6:30
  Speaker 2: so b man. It turns out this Tree Day promotion
• 6:32
  Speaker 2: by Grilled may have planted more questions than actual trees.
• 6:37
  Speaker 2: It's been four weeks since the schedule budget dropped, and
• 6:39
  Speaker 2: we want to get your thoughts on how it's going
• 6:41
  Speaker 2: to impact you. In the show notes of the pod,
• 6:43
  Speaker 2: we've left the link to a two minute survey to
• 6:44
  Speaker 2: get your thoughts, and we're giving away three one hundred
• 6:47
  Speaker 2: dollars gift cards. To make sure to click the link
• 6:48
  Speaker 2: in the show notes your chance to win and share
• 6:50
  Speaker 2: your thoughts.
• 6:50
  Speaker 1: Thanks for listening, and we'll see you on Friday