☕️ Costly Cocoa

Good morning.

The soaring cost of cocoa is driving chocolate makers to use less of the pricey commodity, or none at all, according to Bloomberg. Producers in West Africa are grappling with drought, disease and overarching structural problems that don’t show any sign of abating. Last week, cocoa futures topped US$6,000 ($9230.50) per tonne for the first time, with concerns it is likely to continue rising.

While companies including Hershey’s, Mars or Nestlé try to cut costs by reducing the size of bars, bulking the sweets out with nuts or caramel, or simply replacing cocoa butter with cheaper substitutes (like palm oil), we desperately hope they deliver our indulgences with a little more gpanache than was afforded to Glasgow’s pitiful Charlie and the Chocolate Factory experience.

🏆 LOI Subscriber #TBD

Market movers

Shares in Star Entertainment Group surged over 8% during trading yesterday to close at $0.52, after reporting a statutory profit of $9.1 million compared to a massive $1.3 billion loss a year ago. However, regulatory controls and a weaker economic environment have weighed on earnings. The casino operator saw revenue slip 14.6% to $865.7 million, while profit excluding significant items dropped 43% to $25 million. The Group is facing a second inquiry by the NSW Independent Casino Commission into its suitability to operate casinos in the state as well as other regulatory challenges in Queensland.

The quick sync

• ACCC will target pricing algorithms and loyalty schemes as it commences its inquiry into supermarket pricing at Coles and Woolworths. (Capital Brief)

• Australia’s largest plastics maker, Qenos, is reportedly planning to shutter its manufacturing plants by the end of 2024. (The Australian)

• Debate is raging around whether the RBA pushed too hard with its December rate rise, pulling next week’s GDP figures into sharp focus. (Capital Brief)

• Southern Cross shareholders launch campaign to oust the company’s chair, board and management. (AFR)

• The SEC is investigating whether investors in OpenAI were misled during the company’s tumultuous leadership shakeup in November. (Wall Street Journal)(Bloomberg)

• Trade Minister Don Farrell wants to see a $100 billion two-way trade boom with China, after political roadblocks are dismantled. (AFR)

Trading floor

M&A

• Human resources firm Hudson enlists Record Point bankers to help find buyers for its tech platform. (AFR)

• Harvey Norman, Nick Scali, and Quadrant's Amart Furniture sale speculation awaits half-year results. (The Australian)

• Rakon, a high-tech frequency control products manufacturer, confirms buyout offer. (AFR)

• Xero partners with BILL to double business size. (Capital Brief)

• South32 engages Bank of America, Herbert Smith Freehills for a $2.5b sale of Illawarra Metallurgical Coal. (The Australian)

  • South32's Illawarra Metallurgical Coal sale prompts expectations for EMR Capital's Kestrel mine. (The Australian)

• Regulator waves through Westpac's HealthPoint acquisition. (Capital Brief)

Capital Markets

• Tech giants Microsoft, OpenAI and Nvidia invest US$675 million in Figure AI, which seeks to transform the global labour market by building AI powered robots for the workforce. (Financial Times)

• Fletcher Building begins Tradelink divestment after a $114m write-down. (AFR)

• Ramsay Health Care's stock surge is linked to potential divestment of its European assets. (The Australian)

• ASIC bankrupts 'finfluencer' ASX Wolf over legal costs, banning him from offering financial advice. (Startup Daily)

• Airtasker improves earnings after job cuts; reports revenue growth and positive EBITDA. (BNA)

• ABEL Energy has enlisted Green Giraffe Advisory to seek around $65m in funding for its $1.7b Bell Bay Powerfuels project. (AFR)

• Speculation mounts on Carter Holt Harvey listing amid building market recovery. (The Australian)

• Southern Cross Austereo launches $30m cost-saving plan amid takeover assessment. (Capital Brief)

VC

• Gravity Drinks wraps up $1m seed funding round with backing from industry partners, strategic investors, and pub groups. (BNA)

People moves

• WOTSO Property revamps leadership after $4.6m profit. (BNA)

• Former CEO of The Iconic, Erica Berchtold, is set to lead Mosaic Brands after Scott Evans' retirement. (SMH)

The watercooler