Movers and shakers in last week's market

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A shudder went through Telstra late last week when headlines appeared stating that the Australian Competition and Consumer Commission's (ACCC) preliminary view was that the structural separation of Telstra could not be accepted.

For an instant, it seemed that the years of careful planning and negotiation had come unstuck at the final hurdle.

These fears were allayed upon release of the full 207-page ACCC report, and although there were still some issues to be sorted through, they were nowhere near as threatening as the headlines first suggested.

In a follow-up statement, Telstra noted that it would continue to work closely with the ACCC to resolve the issues raised, with a view to obtaining acceptance of the structural separation undertaking and draft mitigation plan before the Telstra annual general meeting - where shareholders will vote on the matter - on October 18, 2011.

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Away from Telstra and into the resource sector, takeovers roll on, led by coal companies Macarthur Coal (ASX code: MCC) and Coal and Allied (ASX code: CNA), as well as nickel miner Minara Resources (ASX code: MRE).

Macarthur Coal, which has been in the sights of bidders since early 2010, has finally succumbed and directors have recommended shareholders accept the PEAM Coal offer in the absence of a superior proposal, which stands at $16/share cash.

PEAM Coal is jointly owned by United States mining giant Peabody Energy and the world's biggest steelmaker, ArcelorMittal.

Takeover activity surrounding Coal and Allied is seen as more of a 'cleaning up the books' by Rio Tinto and Mitsubishi Development Corporation, as the joint venture already owns 85 per cent of Coal and Allied between them (Rio Tinto 75 per cent; Mitsubishi 10 per cent).

The takeover transaction was pitched at $125 per share, which was a 39 per cent premium to the closing price of Coal and Allied shares pre-takeover.

Coal and Allied operates three thermal coal mines in the Hunter Valley, New South Wales, and produces around 25 million tonnes per annum.

The Minara takeover bid by international commodities producer and marketer Glencore was another cleaning up the books proposal.

Glencore is aiming to secure the remaining 27 per cent of Minara shares that it does not already own.

At this stage, no recommendation has been made by the Minara board in relation to this proposal, so shareholders should watch this space.

Minara owns and operates the Murrin Murrin nickel mine in the northern Goldfields, where Andrew 'Twiggy' Forrest carved out a reputation for himself in the days of Anaconda Nickel.

Interestingly, Glencore has been a staunch supporter of the project from its inception, so this takeover proposal is anything but a flash in the pan investment decision for the conglomerate.

Murrin Murrin is also one of the few nickel mines in the world that is successfully processing laterite ore, with most nickel deposits - such as the Mt Keith deposit - focusing on nickel sulphides.

The other nickel laterite mine of note in WA is Ravensthorpe, which is owned by Canadian listed First Quantum after it purchased the mine from BHP in December 2009.

According to First Quantum, the project was on schedule for commissioning in the second half of 2011 and had an expected mine life of 30 years.


_Information contained in this article does not consider your personal circumstances. You should consult a stockbroking professional before making any investment decisions. Sentinel may hold positions in stocks discussed from time to time. _

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