KEY POINTS:
This is a sad tale of lack of ambition, a lost opportunity and what might have been.
It's also all about waste.
When Kim Ellis was chief executive of Waste Management, he had his eye on Australasian waste company Cleanaway, in the hope that by combining the two
companies he could take a bigger bite of the Australian market.
His firm had been making good inroads into Australia and this would have been a big step up.
This week Ellis' vision was fulfilled, but not by him or any other New Zealand chief executive.
Instead, Australia's Transpacific Industries will amalgamate the two companies, having bought Cleanaway this week following its acquisition of Waste Management just on a year ago.
Ellis and the Waste Management directors had concluded that trying to buy Cleanaway was too ambitious. So in March last year, they decided to accept a takeover offer from Transpacific Industries, the A$3.6 billion Australian rubbish company Terry Peabody founded 20 years ago.
Cleanaway was sold to US private equity firm Kohlberg Kravis Roberts instead, which in a surprising move flicked it on to Transpacific on Wednesday.
Had Waste Management resisted the takeover bid and remained a listed company, the story might have been different.
There's little doubt that Waste Management would have missed out on buying Cleanaway when it was sold to KKR last year.
But what about this week? Another year of strong, construction-led profit growth and another year of share-price growth and maybe, just maybe, it could have had another chance of buying Cleanaway ...
Maybe not, but at least the company would have been in there with a shot.
And if it missed out, Waste Management could have bid for WSN Environmental Solutions, which the New South Wales Government is selling. With an expected price tag of around A$300 million, it would have been well within Waste Management's scope.
Ellis identified WSN as a target as long ago as August 2005. With 10 waste-recycling, processing and disposal facilities in NSW it would have been a perfect acquisition for Waste Management to continue its expansion into Australia.
Instead, guess who's lining up to buy the business? That's right: Terry Peabody's Transpacific.
Skycity chief to front up
Following disquiet from shareholders, SkyCity Entertainment chief executive Evan Davies is to front up to the market next Tuesday.
Davies is in effect being called to explain himself and will brief institutional investors and analysts.
In its invitation to institutional investors, SkyCity has promised it "will provide an update on operational, marketing and cost-reduction initiatives which are in progress and are planned to address the earnings performance of the Auckland business".
"Evan will also take the opportunity of the Auckland briefing to cover a number of other aspects relating to the wider SkyCity Group."
The invitation - sent out yesterday - had institutional investors madly speculating about what it could all mean.
Some just expect that Davies will try to regain the confidence of the market by presenting his strategy and showing everything is under control.
Others - who have focused on the phrase "cost-reduction initiatives" - are wondering about something more radical, maybe divesting some assets, maybe staff reduction.
Institutions have been unhappy with the performance of SkyCity, particularly since the last result. They're concerned about the poor return from many of SkyCity's acquisitions and the weakening performance of the flagship Auckland casino and hotel.
Its last result was underwhelming, raising doubts about whether the company really knew what was wrong with its Auckland business that had performed badly or how to fix it.
It is understood some major Australian shareholders have been in touch with the board, which may be the catalyst for Tuesday's briefing.
In a research report this month, ABN Amro plopped a "buy" rating on the stock and said it expected its return on capital to improve.
But in a damning rider, the brokerage said: "This assumes SKC does not invest in any projects that are potentially value-destroying."
The brokerage suggested one way the share price might improve would be "either board and/or management changes that potentially result in improved operational performance and shareholder wealth creation over and above the markets current forecasts". That's a view that probably isn't unique to the analysts at ABN and one that Davies will be doing all he can to counter on Tuesday.
Income Tax Cuts When?
Michael Cullen argues that now isn't the time for income tax cuts, because any extra take-home pay would over-stimulate the economy and the housing market and force interest rates to go higher still.
Maybe, but to extend that logic, you'd have to ask is there ever a right time for Cullen to cut income tax?
Presumably tax cuts could be introduced when the economy is slowing and needs some stimulus.
But at that point the Government's business and personal tax take would probably be declining and the amount it pays out in unemployment and sickness benefits would be rising.
In light of the worsening fiscal position, Cullen could argue that income tax cuts were unaffordable.
* Christopher Niesche is business editor of the Herald.
