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Lateline Business -

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Lateline's stories or

transcripts, you can visit our

website. Now here's Lateline

Business with Emma Alberici. Thanks very much, Thanks very much, Tony.

Tonight - a deal too far?

Investors run from Rio as BHP

runs the ruler over Alcoa. It

could put another 9% of income

into the BHP coffers. That's

nothing to be sneezed at.

They're doing the numbers. 87

cents and rising - a strong

outlook for commodities has

economists musing economists musing a dollar at

par twit greenback. What's in

a name? By clicking onto our

trademark name which is

Stickybeek corruptly spelt with

the EE it took people through

to the Trading Post website

rather than to our automotive

section on Stickybeek. All of

that shortly. First to the

markets, and Australian shares markets, and Australian shares

retraced gains made in early trade, finishing the day in the

red. The All Ordinaries shed 7

points weighed down by falls in

Rio Tinto and BHP Billiton.

The ASX200 lost 9 points. In

Japan, the Nikkei was closed

for a public holiday. The profit takers arrived in Hong

Kong and wiped 0.5% from the

Hang Seng. In London the FTSE 100 ask 19

100 ask 19 points lower. Just

days after Rio Tinto launched a

record bid for Alcan,

speculation is mounting that

BHP Billiton is about to set a

benchmark. Rumours are

circulating that BHP Billiton

has hired Merrill Lynch to

examine a $57 million tilt at

Alcoa. The company has remained tightlipped but analysts say this round analysts say this round of

consolidation has a long way to

run. Neal Woolrich has our

story. As the global resources

giants continue to rake in

record profits, it's leaving

them cashed up and hungry for

acquisitions. Hot on the heels

of Rio Tinto's deal with

Canada's Alcan, BHP Billiton is

reportedly looking at a $57

billion bid for the US

aluminium producer, Alcoa.

it could put This deal if they did go for

it could put another 9% of

income into the BHP's coffers.

That's nothing to be sneezed

at. They're doing the numbers.

We're looking at a 2-week

turnaround before they come to

market. Rio Tinto is offering a

30% premium above Alcoa's bid

for Alcan and 65% more than the

price before the Alcoa bid.

Analysts expect BHP Billiton

would have to pay even more

above Alcoa's current market value. value. But the likely price

tag is leading some to question

whether such a deal would make

Billiton's always looking over sense for BHP. I think BHP

its shoulder and especially now

that Rio has grown in terms of market cap on the assumption

that the merger goes through

with Alcan. They've got

projects in-house, expansions

to existing facilities, new

projects coming on stream,

which I think will be enough

for them on their plate. At least at the moment. And Peter least at the moment. And Peter

Rudd argues that Alcan is a

better fit for Rio Tinto than

Alcoa would be for BHP. It

bulks Rio Tinto up. There was

a danger if Rio didn't make an

acquisition that it in itself

could become a target. Now

it's the predator, it's got on

board something like $44

billion worth of Alcan which

added to what its market cap is

already takes it to already takes it to about US

$150 billion which is not much

Billiton. Shadforth's Keith behind BHP

Thompson says companies are

unlikely to mount rival bids. It's a consolidation of

the industry, which is what

everyone has wanted. It's now

let them deal with this and I

think there will be more consolidation in that environment. I think it will

be the two big players sorting

this out. So far, investors this out. So far, investors

have remained wary about the

latest round of takeover

manoeuvres. Rio Tinto 's share

price down by 4% adding to

Friday's 2.5% fall. BHP

Billiton lost 2.5% today. But

analysts argue that a $57

billion takeover wouldn't

strain BHP Billiton's cash

flows. It sounds like they've

got enough. They don't need to

go to private equity. go to private equity. They've

got it pretty well in-house. I

don't see that as being a

problem with them. They've got

marketing agreements with

smelters in Victoria already.

It could make sense. Market

watchers say a union between

BHP Billiton and Alcoa is

likely to meet resistance from

competition regulators around

the globe. Locally Rio Tinto

has been issued with a " please

explain" issue on the Alcan

deal by the Australian

securities exchange. But the securities exchange. But the

company says it's complied with

the ASX listing rules and kept

the market fully informed while

the takeover was being

negotiated. All eyes were

indeed on the mining sector

today on an otherwise uninspiring day on the

marketses. For an overview I

spoke earlier to Julia Lee from

Hubb Financial. Julia Lee, a

fairly uneventful day on the

we were off to market? A quiet day, although

we were off to quite a strong

start following the strong lead

by tus, we changed direction

around about midday. It was

really Rio Tinto and BHP

dragging on our market. We saw

a big loss by Rio Tinto today.

It was down by 4%, and BHP

Billiton was down by 2.5%. In

the other areas we did see

strong gains and a highlight

where was in the industrial sector

where we saw Lleyton's go up

2.5%. Macquarie infrastructure

rose 2.9%. A bounceback in

banking stock. Last week we

ended the week with banking

stocks lower. Today we saw

bampging stocks come back.

Westpac a leader there, it was

up by 0.8%. Macquarie Bank had

a very strong day rising 2%.

On the downside we saw Telstra lose more than 1%. That On the downside we saw Telstra

dragged on our market. We did

off the week on a lower

note. Most of the action today

in the resources sector on further talk of

consolidation? I think that Rio

bid for Alcan really triggered

a wave of speculation on

consolidation within the

resource sector. So although

we saw BHP Billiton and Rio

Tinto much lower today, the

rest of the stocks in rest of the stocks in the

resource sector were much

higher. We saw stocks like

alumina was up very strongly. Alumina's joint venture

partners with Alcoa, said to be

the next takeover target by BHP

Billiton. So we saw alumina up

2.9%. Oxiana, which has been

at the centre of takeover

speculation was up 2%. The speculation that

speculation that be that Oxiana

will bid for Zinifex. Today we

saw Zinifex down 2.4%. It

could be that the market's

really shifted its sights to

Cangara zinc, up more than 5%

on takeover speculation. All

that takeover talk is really at

the centre of what's been

driving prices today. I note

consolidated minerals was trading trading significantly higher

today, another resource stock

in play at the moment? There

was great news from Consolidated Minerals today

that it was looking at upping

its 2008 forecast because of

higher magnesium prices.

However the market did ignore

that and and the focus was on

takeover offers. Consolidated

Minerals already has a current

issue from PallingHurst , issue from PallingHurst , a

private company. Today the resources went into trading

halt. All eyes are on

Territory to make a counterbid

for Consolidated Minerals. A

bidding war is just about to

start off. That's done wonders

for Consolidated Minerals'

share price. It's jumped 6%,

eending the day at $5.45. Julia

Lee, thanks very much for

Lee, thanks very much for

that. Thanks, Emma. Now for a

quick look at the other major movers on the Australian stock

market today.

With a range of commodities

trading at or near record highs

the Australian dollar is also

steadily tracking higher. steadily tracking higher. The

currency is now at levels not

seen since the late 1980s. But

traders say it's still

relatively cheap given we're

now benefiting from the best

terms of trade in 50 years.

Now at least one major bank is

predicting the dollar could

reach parity with the greenback

in the not too distant future,

as Andrew Robertson reports.

The last time the Australian

dollar was worth more than the dollar was worth more than the

greenback, Jimmy Carter was in the White House, Malcolm Fraser

was in the Lodge and global

warming was not an issue for

either leader. With the Aussie

currently trading at US 87

cents and rising, the National Australia Bank believes

conditions are ripe for it to

reach parity with the greenback

. Anyone who thinks the Australian dollar's going to

weaken big-time in a hurry is

probably mistaken. The only thing that could cause that would be a major recession in would be a major recession in the US and that really doesn't

look to us to be the most

likely outcome. According to

Alan Ouster the dollar hitting

US $1 would be a mixed

blessing. Inflation tends to go

down a little bit. You can

become less likely that the

Reserve Bank will increase

rates. It swings in roundabouts. At the end of the

day it probably will slow the

economy. There are four main

reasons for the dollar's

advance:

Although the US dollar grabs the

the headlines, Bessa Deada says

there's more to the story.

It's not appreciating against

a broad-based US dollar, but

against the currencies of its

major trading partners. If we

look at the Trade-Weighted

Index, it is at its highest

level since March 1985. Which

means for the export sector,

Australian produce bought in Australian dollars Australian dollars is becoming

more expensive and, therefore,

less competitive. But Tim

Harcourt at Austrade says it's

not the issue it was many years

ago. For most exports it's the

growth in the world economy,

the rise in China and India,

Europe coming back and building

relationships in overseas

markets and we've had a

floating exchange rate for a

quarter of a century. They're

used to the swings and

roundabouts from the dollar's

ups and downs. Importers are ups and downs. Importers are the winners when currencies go

up. One of them is

Sydney-based Salon and Spa

which buys much of its product

in US dollars. When I took over

the business 18 months ago the

Australian dollar was buying

about US 76 cents. Now I guess

we're buying 15% more goods for

the same Australian dollar. For

Duncan McPherson the dollar is a

a two-edged sword. His

products are in demand in

neighbouring countries like

Fiji, but the exchange rate has

forced him to disbandon plans

to export. We had considered to

supply them exclusively to

resorts that run day spas and

yeah, it's become cost

probative. We're not

competitive. Duncan McPherson competitive. Duncan McPherson

can consol himself with the

knowledge that Australian-made

rivals to products are becoming

increasingly less competitive

against Salon and Spa, a major

headache for all

import-competing industries. Countries that are

domestically in focus they're

missing out on the great boom

in China and India and now

Europe. Basically the best way

to succeed when the dollar is

strong is to become an exporter

and that's the case and that's the case of whether

you import or whether you don't. And increasingly, survival for manufacturers

means carving out a niche which

can sustain demand regardless

of the strength of the dollar.

While the Dow Jones Board and

Rupert Murdoch's News

Corporation have been locked in

takeover talks, one major

investor is fighting to block the deal. Christopher Bancroft, a Bancroft, a member of the

family that controls Dow Jones

is reportedly in talks with

private equity firms and hedge

funds to buy more voting

shares. Time is running out,

with News Corp and Dow Jones

preparing to discuss the final

price later this evening. The

name Stickybeek hasn't got quite the same recognition as

the Trading Post, but three

years ago in the Hunter region of NSW,

of NSW, they became confused on

a Google search. It was the

beginning of what has now

become a world-first legal

action launched by the Australian competition

regulator against Google and

the Trading Post. The ACCC

alleges that the two companies

engaged in misleading and

deceptive conduct over the use

of so-called sponsored links A Google spokesman Google spokesman in Britain

today said the claims were

without merit and would be

vigorously defended. The case

is scheduled to be held in

Sydney on 21 August. Michael

Garnham is the owner and

managing director of Stickybeek

and I spoke to him aye short

time ago. Michael Garnham,

welcome to Lateline Business.

Your company's name didn't

feature on the Australian Competition and Consumer

Commission media release on

this issue, but I understand this issue, but I understand

you kicked it off? I did, Emma.

I was extremely disappointed,

in fact, to see that we weren't

included in this case that's

going to the Federal Court.

Extremely disappointed to say

the least. The amount of time

and effort that I put into

making the ACCC aware of

exactly what was going on, to

then find out that we didn't

even get a even get a mention, basically I

felt like we were dropped like

a hot potato, if I can say

that. If we can just go back

one step and if you can explain

for us, what exactly is a

sponsored link? How were you

first made aware of what Google

and the Trading Post were up

to? Basically what a sponsored

link is, it's a key word that

you can purchase as a means you can purchase as a means of generating additional business

to your own website. In our

case what actually happened,

the Trading Post purchased a

key word from Google which

happened to be our registered

Australian trademark. By

clicking onto our trademark

name which is Stickybeek

corruptly spelt with the ee, it

then automatically took people directly through to the directly through to the Trading

Post website rather than to our

automotive section on

Stickybeek. You'd click on

Stickybeek spelt your way but

go to the Trading Post

website? You could imagine. We

found out by one of the

technical guys that we've used

with the construction of

Stickybeek and modifications

over a period of time, that

that was happening. When I that was happening. When I

first saw it, to be honest, I

just couldn't believe my eyes.

We're talking about the Trading

Post, a company that had

refused our advertising dollars

with them since 2002 because

they considered us to be a

direct competitor. This is a

company that Telstra paid $623

million for, doing this to a

little micro business in little

old Newcastle. It was

old Newcastle. It was

horrific. And so you rely

primarily on the Internet to generate your

business? Stickybeek is very

much community focussed and our

main focus is on the Newcastle

and Hunter region. Our

automotive section on

Stickybeek is, in fact, the

majority of, is where the majority of our income comes

from. We're a very small

company. We still have a long company. We still have a long

way to go in relation to the

growth of our whole concept.

But it certainly makes it

somewhat difficult when as the

managing director of the

company so much of your time

has been taken away trying to

defend what is rightfully yours

but other people are coming and

taking away from you. Do you

have any idea how long the

Trading Post was using your Trading Post was using your

name? We were made aware of it

in 2004. Up until then I have

no knowledge of it happening

prior to that, but at the time

we were running 350

thereabouts, 15-second

commercials on television per

week, sorry, per month. Now

for people who didn't actually

capture the Web address in

those television commercials in

most cases a big most cases a big percentage of

the population would go

directly to Google, type in the

word Stickybeek and hopefully

find us, but in this particular

case the sponsored link

appeared on the right-hand side

of the page and took people

directly straight through to

the Trading Post. Now your case

was settled? You went to the

ACCC and they got an outcome

for you? Well, they didn't actually. Basically what

happened there and this happened there and this is what

I'm completely annoyed about,

was the fact that the Trading

Post - sorry, the ACCC is

decided not to pursue the

Trading Post, this Telstra-owned company on the

basis that the Trading Post had

agreed that they would

implement procedures and steps

to prevent what they did to us

from happening again. Now as

far as I'm concerned, that's a far as I'm concerned, that's a

very small slap on the

wrist. But they stopped doing

it? They did stop doing it, but

as far as I'm concerned that

really doesn't matter. We're

talking again about a corporate

company who knew who we were

that specifically targeted us

to generate business to their

own site. Two other businesses

from the Newcastle area, automotive

automotive retailers are named

in this latest action brought

on by the ACCC, much like your

own case. But the regulator is

again only looking at having

the behaviour suspended, an

injunction on the use of other

people's names. You're saying

that's not enough? I don't

think that's enough. One of my

other major concerns here is

that not only were we not that not only were we not

included in this Federal Court

action, we instigated and whole

investigation. We were the

ones, Stickybeek were the ones

that notified and ACCC of what

was happening. In fact, I

notified Ford and Charlestown

Toyota, as well. To finish up

with this sort of an outcome is disappointing. Have you had

legal advice? Look, I have had some some legal advice. We're

certainly not in a position to

enter into any form of

litigation from a financial

point of view. We just don't

have the funds to do that. But

the advice I do have is that we

need to pursue it and we need

to look at all of our avenues.

One thing that I do definitely

want to happen is that I want the

the ACCC to broaden the claim

with the Federal Court to

include Stickybeek. They

should have done this in the

first instance. Michael

Garnham, what is the point of

being a member of this current

Federal Court action when all

the ACCC is actually looking

for is an undertaking from the

Trading Post and Google that

they'll stop this behaviour,

which they've already done in

this case? I think the most

important thing that I want to important thing that I want to

make very clear here is it's

essential that Stickybeek is

part of this court action in

the Federal Court to enable us

to seek compensation and

damages. Unless we're a part

of this Federal Court process,

then it does create very

difficult situation for us if

we want to seek damages we want to seek damages and

compensation for what

happened. How is it difficult

for you to seek compensation?

The avenue is always there for

you to pursue a civil case? To

do it privately without doing

it through the ACCC is a very

costly exercise. We're not in

a position to be able to do

that. We just can't afford to

do that. We need the ACCC to

broaden the claim as I mentioned before. mentioned before. They need to

broaden the claim to include

Stickybeek to it does pave the

way for us to be able to seek

compensation and damages in

relation to what the Trading

Post did to us. Can you put an

estimate on what you think the

economic loss has been to the

company? At this stage, we're

still very much in the

determination process there.

As you could imagine it's quite

a complex area. One thing that I will say

I will say is, how do you put a

price on stress? It's certainly

been a very stressful time for

us. Were they using your name

for a month, for a week? Well,

they were using it for quite

some time. We're not exactly

sure as to exactly how long

that they were using it. But

we certainly got onto the ACCC

as soon as we realised they

were using it and the ACCC did work towards bringing a work towards bringing a halt to that. Michael Garnham, thank

you very much for your

time. Thank you, Emma.

Investigations into the

collapse of property developer

Fincorp have resulted in the

freezing of assets belonging to

its founder, his wife and 11

other people. Away from the

courts the future looks a little brighter for the

thousands of investors who lost their money.

their money. The company's

receiver, Ferrier Hodgson, says

offers for the group's property

portfolio in Victoria and NSW

have been accepted,

representing a value of $204

million. If the deals are

approved at next week's

creditors' meetings, secured

investors can expect a return

of at least 50 cents in the

dollar. That's up from earlier

estimates of 30 cents. estimates of 30 cents. The

fate of unsecured investors who

still stand to lose their entire investment will depend

on legal action against the

former directors. 8,000

investors lost money when

Fincorp collapsed in March,

owing nearly $300 million. Now

a look at tomorrow's business

diary.

A look at what's making news

in the business sections of tomorrow's newspapers. The

'Age' says takeover rumours have

have helped alumina's market

value soar. The 'Australian

Financial Review' calls for red

tape to be cut in the

administration of the country's

ports and airports. And the 'Sydney Morning Herald' leads

on the freezing of those assets

belonging to the Fincorp

executives. That's all for

tonight. The London market is

down 33 points and the Dow

Futures are up 2 points. If

you want to review any part of tonight's

tonight's program, visit our

website. You can watch the

entire program online, or

download it as a vodcast. We'd

love to get your feedback. I'm

Emma Alberici. Ali Moore will

be back in this chair tomorrow

night. Thank you very much for

having me. Goodnight.

Closed Captions by CSI

I'm Richard Rudgley. I've decided to delve into our past

to find out what makes us who we are today. Exploring the Dark Ages, I found that our barbarian ancestors were not mindless savages. Now I want to fill in one more critical piece of the puzzle. We think our lives are shaped by 2,000 years

of Roman and Christian tradition. But I've never bought into this. For generations before the Romans came along, we all lived in a very different world. And I believe this world still plays a major part

in who we are today. This is the world of the pagan.

SCREAMS

If I told you that this kind of male culture - beer drinking, football hooligans, on the rampage - had its roots in our pagan past, you probably wouldn't be too surprised. But what about the media frenzy

that surrounds our soccer heroes? what about their celebrity lifestyle? And what about the precarious nature of their careers? And the here-today, gone-tomorrow managers? Well, these too are echoes of our pagan ancestry. There's also a direct connection between the male culture of the pagan world and the members and leaders of that other famous men's club. The Houses of Parliament.

On a journey across Northern Europe and back through nearly 3,000 years of history,

I'm going to explore the lives and the aspirations of the pagan men and their leaders that have helped to make us what we are today. It's not gonna be easy. Our pagan ancestors didn't write things down. But the evidence is there and sometimes in the oddest of places. I'm starting my journey

in just such an unlikely place. At the grave of a man, who, on the face of it, sums up everything that's chivalrous, knightly and Christian - King Arthur. He was said to be buried here at Glastonbury. But this Arthur is an impostor. Because the real, original Arthur was a pagan warrior king.

We know Arthur is a Christian, from a world of Holy Grails and courtly love. But actually, Arthur was a pagan leader. He led a band of warriors, that lived and died for one thing. Fighting. What you have, in the early sources, is this barbarian king, a battle leader. And he's a very...not primitive, in the sense that he isn't developed but he certainly has these primitive characteristics of leading a band of warriors. Not refined knights but warriors. So what would this original Arthur have done during peace time? Well, the original Arthur during peace time would probably have prepared for war. (Laughs) This, this, this was a war economy. This was not a peaceful world in the sense that we think of the ideal, is an ideal where a king rules over a peaceful land. This was a world where you were constantly testing yourself against your enemies. Sometimes even against your friends. So there's a very strong code there, a bond between the king or the leader and his warriors?

It's very, it's very, very strong. They're almost like foster brothers. And of course, it would have been reinforced where children would be sent to live with others equivalent of their social status. So that you'd get this very complex network of loyalties and alliances. And this really what kept society going. And you fought for these people. You defended them

when they were in trouble. It was a very strong sense of 'we belong to a group'. For this King Arthur, there were no Knights of the Round Table. Just a band of men, living together, brought up together, for the sole purpose of fighting. It's now possible to build up a detailed picture

of daily life in this macho, warrior society. Home was not some mythical castle. Iron age hill forts, like this one, are scattered across southern England and they are the blueprints for the real Camelot. 300 years before the birth of Christ, this was what the local band of brothers called home. A gated enclosure, a collection of small houses, dwarfed by a number of massive halls. The hall was the focus of this society. The place where the warriors would meet for lavish feasts and heavy drinking. The archaeological finds from this time include pottery bowls and dishes, decorative brooches, alongside weapons of war.

A lifetime of studying Danebury Hill Fort has given Barry Cunliffe a vivid picture of life amongst these pagan men. One of the classical writers says they drink lots of wine. Which is marvellous for us, because out traders provided it for them.

"They'll give us a slave for an anther of wine," he says. Marvellous deal, for a Roman. He says that they're so barbaric, that they drink their wine actually undiluted. You know, we, self-respecting Mediterraneans dilute our wine, those barbarians just swill it down. So, it gives you a picture of, really, quite a drunken orgy.

Then, as now, if a group of hard-drinking, northern European men got together, alcohol-fuelled boasting and eventually violence was the likely result. You can imagine a young man wanting to make a name for himself... ..um, saying, "I'm a great hero. "I can go and capture dozens of cows "and, and women and beat up our neighbours". You know, "I'm that kind of hero. I can do that".

So no great surprises here. The men of our early society liked to drink and violence often followed.

We could write-off our ancestors as antisocial lager-louts. But another look at the Arthur myth shows this is only half the story.

You see, there's always a grain of truth in the most colourful of legends. And Arthur and his heroic knights are not complete fantasy. Behind the posturing and bad behaviour, this was actually a society for heroes. Disputes between rival communities were not settled by two armies fighting to the death. Instead, each side chose a champion. A hero, who would take on the enemy of behalf of the community at large. The heroes from each side would come out. they would fight each other, someone would die. someone would win, Fight to the death? Fight to the death. the norm. Um, this seems to have been throughout the day. And this would go on thoroughly good day's entertainment. Um, until everyone had had

they would go home, And then normally saving most of manhood, crops and herds and society going. which is crucial for keeping the

slaughter lots of people. You don't want to would represent their communities Warrior champions to prevent widespread bloodshed. trained for, lived for. This was what the band of brothers They were the cream of the society,

through their prowess in the field. seeking fame and fortune of their day. They were the sporting heroes And there's a noisy echo of controlled aggression of this pagan idea every Saturday afternoon. are our champions, Today's football stars for us on the pitch. fighting our battles

So our pagan ancestors were not simply mindless thugs. to warfare, They had a controlled approach that kept casualties low. essentially local disputes. But these were these disparate bands of warriors What chance did in history - have against the great war machine

the Roman Army? It's AD60 and it's the night before take on the might of Rome, a horde of unruly native Britons legionary fortress of Camulodunum - at the modern day Colchester. there should only be one winner. On paper,

were the greatest military machine The Romans

the world had ever seen. And for its occupying army,

was the jewel in their crown. Colchester although greater in number, The ancient Brits, were not a disciplined fighting unit. a collection of warrior bands, They were fighting amongst themselves more used to to a common enemy. than presenting a united front

did count for something. But their training in the hill forts our pagan ancestors For when it came to battle, were completely fearless. "The Britons are war-mad. and quick for battle. "And both high-spirited

to risk everything they have, "They are willing their physical strength and courage." "with nothing to rely on, other than It's hard to find evidence as physical courage for something as intangible across so many centuries. And very few skeletons have survived from these times. paints a dramatic picture But a rare find from Ireland of the death of one pagan warrior. Like a pathologist at a murder scene, the remains of this pagan warrior Laureen Buckley has examined in minute detail. And the story that these

is one of courage, fortitude battle-scarred bones tell in the face of certain death. and extreme strength of will He was obviously in a fight. than a fight between two people. I think it was a battle, rather He must have had a weapon. Probably a sword in his right hand.