BREAKFAST DEALS: ACP overboard?

Nine Entertainment may be on the verge of offloading its magazine division, while BHP keeps its options open.

Former Mornings host Kerri-Anne Kennerley has compared Nine Entertainment to the grounded Costa Concordia and it appears there’s movement on the bridge to save the drifting vessel. Nine’s advisers have reportedly spoken to Seven West Media executives about a possible sale of ACP Magazines as the company’s private equity owners CVC Asia Pacific grapple with billions of dollars of debt due to mature in about 12 months time. Elsewhere, BHP Billiton chief executive Marius Kloppers still thinks there are acquisitions on the horizon, but you won’t get an answer out of him about expected Glencore target Anglo American. Meanwhile, National Australia Bank has received some encouragement to get out of the UK, Ludowici is now the subject of an international bidding war and Thailand’s Mitr Phol is trying to bring its MSF Sugar bid to a close.

Nine Entertainment, ACP Magazines

It appears there’s movement at Nine Entertainment to get rid of its magazine division and generate some cash to help pay down the enormous debt burden that’s leaving it vulnerable to opportunistic US hedge funds. The Australian Financial Review understands that Nine’s advisers at Macquarie have engaged Kerry Stokes’ Seven West Media over a potential acquisition of its ACP Magazines division.

Any sale would no doubt help Nine’s owners at CVC Asia Pacific pay down some of the debt that’s increasingly held by US hedge funds Apollo Global Management and Oaktree Capital, which are hoping to convert that debt into equity. The newspaper says the hedge funds might in fact have to approve any sale of ACP because the proceeds would go into paying down the debt, while Nine is working on a refinancing package with Macquarie.

BHP Billiton

BHP Billiton chief executive Marius Kloppers may have taken the foot off the pedal when it comes to shale gas, but that doesn’t mean his yet-to-pay-off $US20 billion punt has put him off acquisitions. Speaking to ABC TV’s Inside Business, Kloppers said he has "absolutely no doubt” that BHP will do more transactions in the future, but refused to be drawn on when or what.

While he didn’t offer a timeframe, it’s fair to say that he would be commenting on the period relevant to his time as chief executive which isn’t exactly coming to an end any time soon, but certainly won’t go on forever. So we can assume BHP will purchase something else with Kloppers in the top job, it’s just a matter of what.

Kloppers wouldn’t be drawn on speculation that BHP could be interested in acquiring Anglo American. This scenario in all likelihood would pitch BHP against Glencore International, assuming that its takeover of Xstrata gets bedded down. Xstrata failed in its run for Anglo in 2009 and with chief executive Mick Davis set to take the top job at the combined entity, it’s widely thought that he’ll use his newfound firepower to satisfy past ambitions.

Running at Anglo would appear to be a slight change in direction for BHP. Yes, it would mirror its attempt to grab Rio Tinto – a diversified miner with many divisions – but the most recent targets BHP has been linked to have been more specialised. PotashCorp has a more targeted portfolio in an industry BHP wants in on, while Ferrous Resources and Walter Energy, which BHP has reportedly had a look at, are more specialised. Anglo also recently took out the De Beers diamond company, just before BHP decided to exit that industry entirely.

National Australia Bank, Clydesdale, Yorkshire

National Australia Bank chief executive Cameron Clyne has been given a little extra push to offload Clydesdale and Yorkshire Bank and end the Melbourne-based bank’s UK experiment forever. NAB has announced a "review” of its UK operations, but UBS banking analyst Jonathan Mott reportedly says it’s time the company got out of the market. According to The Australian, Mott issued a note to his clients arguing that Clydesdale and Yorkshire offer no strategic value and are too small to aid profits but large enough to provide exposure to the troubled European banking sector.

Ludowici, Weir Group

Julian Ludowici might be poised to wave goodbye to the company that’s been in his family for over 150 years, but at least it’s getting a mighty send-off. The ASX-listed mining technology company is now the subject of a bidding war with global engineering firm Weir Group throwing up a $7.921-a-share indicative proposal, subject to due diligence, valuing the company at around $294 million. That offer trounces the $7.20 that Danish company FLSmidth has put on the table.

Ludowici appointed ICS Advisory and Gilbert Tobin as advisers when the FLSmidth offer was received and, unsurprisingly, has decided with them that Weir Group should be allowed to conduct due diligence.

African Iron, Exxaro

Shareholders in African Iron are holding out right to the end for a better offer than the one from South Africa’s Exxaro, but it’s not looking good. Exxaro has 51 cents a share on the table and that rises to 57 cents if it receives 75 per cent acceptances, but that’s a long way off. Tony Sage’s Cape Lambert has tipped in his company’s 19.9 per cent stake in African Iron and will chip in the remaining 5.1 per cent today. This will bring Exxaro to about 30 per cent, which is quite simply not enough. The proposal expires tomorrow and there’s no extension coming.

The next big shareholder on the horizon is Equatorial Resources, seen by some as a potential bidder, with 19.9 per cent. Equatorial hasn’t indicated which way it’s going to go but without its support acceptances have been painfully slow. African Iron shares are also trading around 56 cents so unless someone on the selling side blinks soon, there’s some downside that’s going to be worn.

Maryborough Sugar Factory, Mitr Phol

Thailand’s Mitr Phol might have secured a majority of Australia’s Maryborough Sugar Factory (MSF Sugar) but that hasn’t stopped its appetite from demanding a quick digestion. When last we heard, Mitr Phol’s stake in MSF Sugar was at 79 per cent thanks to its $4.45 a share, $313 million cash offer. The Australian Financial Review believes Mitr Phol was behind a noticeable increase in trading volumes in the dying minutes of Friday’s session and is expected to be in the thick of it this morning as it tries to bring its bid to a conclusion.

Wrap up

One of the Packer family’s long-time confidants has got the ball rolling in the freight-forwarding sector, The Australian reports. Ashok Jacob, through his funds management business Ellerston Capital, has forked out $5 million for a strategic stake of an undisclosed size in e-commerce company Temando. Speaking of the Packers, a company once controlled by the famous Australian family, Living and Leisure Australia, is now more or less completely in the hands of theme park company Merlin Entertainment after the company grabbed 93.66 per cent of its target and moved to compulsory acquisition with its $140 million offer.

Local private equity player Catalyst Investment Managers has picked up a 49 per cent stake in Morris Corporation, a services provider for the resources sector, for an undisclosed sum. This comes right on the back of a 100 per cent stake Catalyst just grabbed in AC Components, a Victorian-based air conditioning company.

And finally in resources, gas and oil junior Tap Oil has reportedly managed to remove itself from the messy battle between Burrup Fertilisers and Alcoa by offloading its 12 per cent stake in the Harriet joint venture, The Australian Financial Review reports.

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