ASX gains 1 per cent, takeover bid sends lithium sector higher

The local market continues to overcome weakening global economic sentiment, with the S&P/ASX200 powering to another 1 per cent gain on Tuesday. The market was buoyed by the mining and energy sectors, which gained 4.1 and 2.2 per cent respectively on the back of a suite of takeover offers. The highest profile of which was lithium giant Abermarle lobbing an indicative bid for Liontown Resources (ASX:LTR) of $2.50 per share valuing the company at $5.2 billion. The offer naturally sent the share price surging, up 68 per cent on the day, with management indicating they believe the bid ‘undervalues’ the company. The news sent the entire materials and lithium sector higher, with Allkem (ASX:AKE) and Pilbara (ASX:PLS) gaining 13.7 and 11.9 per cent respectively. The energy sector was similarly strongly benefiting from an improving outlook despite the banking system issues, with Woodside (ASX:WDS) gaining 4.8 per cent as the oil price recovered.

United Malt under offer, retail sales slow, Brookfield confirms Origin deal

Malt producer United Malt (ASX:UMG) managed to avoid the spotlight, despite surging by 30 per cent during the session. In a sign that global companies are increasingly willing to pay for growth, the company announced it had received a binding and exclusive bid for the company at $5 per share, 45 per cent above the prior closing price. The buyer is Malteries Soufflet, the largest maltster in Europe. Closer to home the impacts of inflation and higher interest rates are showing up in retail sales, which grew just 0.2 per cent in February, likely shrinking after inflation is taken into account. Spending in restaurants and food remains the highlight, up 17 per cent year on year, but slowing as we move deeper into 2023. Origin (ASX:ORG) this morning confirmed that had signed the takeover deed with the global private markets syndicate led by Brookfield. The deal will receive at least $3 billion in debt funding with the new owners stating their commitment to decarbonising the business.

Alibaba set to split, Nasdaq falls as yields jump, Walgreen’s beats expectations

Increasing bond yields on the back of relative calm in the financial sector saw all three benchmarks fall overnight. Led by the technology sector, which fell 0.5 per cent, valuation remain clearly in focus, with both the Dow Jones and S&P500 falling 0.1 per cent. Any day without news of the banking is resulting in a stabilising of the market. But all eyes were on Chinese technology stocks after giant Alibaba (NYSE:BABA) announced it would be splitting into six separate business units, each with its own CEO and board. This would be split into Cloud, Taobao, Local Services, Smart Logistics, Digital Commerce and Digital Media. The result was a near 15 per cent increase in the share price on hopes that the full value of the company would be realised. Walgreen’s Boots Alliance (NYSE:WBA) shares gained nearly 3 per cent after the company reported a return to sales growth, and improving outlook, despite delivering a profit that was lower than in 2022.

Drew Meredith

Drew is editor of The Inside Network's publications and a principal adviser at Wattle Partners.