BREAKFAST DEALS: Acquiring Austar

The long awaited merger between Austar and Foxtel finally hits the screens with the market to get a clear picture of the $2 billion merger. The Lowys stay mum on European expansion plans but Westfield may be looking to offload a bevy of malls, worth $1.2 billion in the US. Meanwhile, NAB may have found a partner to launch its assault on Lloyds branches in the UK after a report touts the bank as the sole serious contender, Macquarie Group gets into a tax fight with the ATO and GE Capital sells its loan book to low doc operator Pepper Home Loans. Elsewhere, Gina Rinehart becomes the first woman to rule the roost in the BRW rich list 200, Pharmaxis' chief executive fortuitously escapes the carnage after the company's stock is given a thrashing by the market and Lucy Turnbull's cancer therapy group unveils a $38 million raising.

Austar, Foxtel

The long awaited marriage of pay-TV operators Foxtel and Austar United Communications could finally see the light today with Austar's chief executive reportedly set to provide the market with a more concrete picture of the $2 billion merger. The offer from Foxtel is reportedly around the $1.52 a share mark, which is a 20 per cent premium to Austar's last closing price of $1.265 and at the range that Foxtel's major shareholder Telstra Corporation has been willing to pay. Telstra's support is a crucial factor in the deal given that it was instrumental in scuttling the previous two takeover talks in 2005 and in 2007. Austar's major shareholder Liberty Global wanted $2 a share in 2007 but given the current strength of the Australian dollar a deal $1.52 a share will be more than palatable. Telstra is also evidently more comfortable this time around with the amount of debt, some $1.2 billion, that Foxtel will borrow to fund the deal. As for Foxtel's other shareholders, News Limited and James Packer's Consolidated Media Holdings have been backing this deal since talks began late last year, so news that a formal offer is now ready for announcement indicates that the two have ironed out their differences with Telstra and most of the boxes have been ticked. However, one thing to remember is that today's announcement should will be a major update and not a final binding proposal, that means Austar minority shareholders will have to wait a touch longer before they get to have their say. According to The Australian, a binding offer is expected to be presented through a scheme of arrangement and will require a shareholder vote, court approval and an independent expert's report. The Australian Competition and Consumer Commission will also have bit to say about the deal but should wave this one through.

* Austar has since received an indicative, conditional takeover bid from Foxtel priced at $1.52 per share, in line with the reports in The Australian. The deal, which is subject to regulatory approval, values Austar at $1.9 billion and follows months of talks between Foxtel, its major shareholders, Austar and major Austar shareholder Liberty Global. While Austar and Liberty had so far kept a tight lid on how the talks were progressing, the market can finally have a look at just what's on offer and just what the merger will mean to both pay TV operators. According to Foxtel, the merged companies would bring in combined revenue of $2.8 billion per annum, and Foxtel boss Kim Williams has rather unsurprisingly touted the merger as a "win-win" transaction. The deal comes with all the usual bells and whistles and although it's still conditional in nature Austar's board seems happy with the price on the table. Austar has appointed Goldman Sachs and Freehills as advisors, while Foxtel is being advised by AquAsia, UBS and Allens.

Westfield Group

Westfield Group may be keeping tight lipped about its possible plans of expansion in Europe but there is already talk that the global retail landlord may be mulling the sale of a suite of shopping assets in the US. Westfield is reportedly set to unveil the sale of up to $1.2 billion worth of US shopping centres. Westfield has made no secret of its desire to shift out of its non-core assets and the speculation of an imminent sale intensified after Westfield's joint managing director, Peter Lowy, told the market yesterday that there was money to be made in the US when it comes to selling malls with buyers coming out of the woodwork. The talk is that Westfield is now looking to put up to 17 malls on the block and sell some of the assets into 50-50 joint ventures and maintain the management of the malls. The list of prospective suitors reportedly includes hedge funds LaSalle Investment Management and Blackstone Group, who have really developed a taste for cutting deals with Australian property groups. The other likely candidate is Morgan Stanley Prime Property Fund which forked out $517 million this week to buy Lend Lease's half share in the King of Prussia mall in Philadelphia. The Lowy clan was pretty quiet on the European front after UK's Independent newspaper reported over the weekend that Westfield was in talks with Italian developer Gruppo Percassi to develop a shopping centre to the east of Milan, and was also bidding against rival property developers for a project in Brussels.

NAB, Lloyds

National Australia Bank is playing down talks that it is ready to buy all or parts of the Lloyds Banking Group's branches in the UK after a BBC report flagged that the Australian bank has been touted as the sole serious contender for the assets. That comes as a bit of a surprise given that the branches have been on the radar of Sir Richard Branson's Virgin Money and NBNK Investments, the bank buyout vehicle which is headed by Lloyds of London chairman Lord Levene and former Northern Rock chief executive Gary Hoffman. However, the Australian Financial Review reports that the bank is looking to obtain advanced accreditation for its UK unit, a move that gives it extra muscle when it comes to bidding for Lloyds' branches. There was also talk in April that NAB was looking for potential partners to launch a joint bid for the branches. The bank was reportedly in early discussions with NBNK and Spain's BBVA. NAB is going great guns in Australia but the UK operations have been somewhat of a letdown and the idea is that the bank finds a partner, spins off its existing UK assets into a joint venture and waits for favourable market conditions to steadily sell down its stake in the venture. If the assertions in the BBC report that UK regulators are unlikely to let one of Lloyds major rivals buy the branches are true then there is a chance that NAB may have secured a partnership with the likes of NBNK and BBVA to buy the branches. Lloyds is set to unveil the results of a group-wide strategy review on June 30.

Macquarie Group, GE Money

Moving to other news in the financial sector, it would seem that after targeting private equity operators the Australian Tax Office has now turned its attention to Macquarie Group. According to the AFR, Macquarie is now set to face court next month over allegation that it used a private equity-related tax avoidance scheme in the $480 million sale of shares in Minara Resources, a nickel company founded by Andrew Forrest. The ATO says that Macquarie owes it $318 million from the 2004 sale of Minara shares to private equity fund Matlin Patterson. Macquarie in its defence says that it has already paid the appropriate $12 million in tax it owed and has not implemented any tax-avoidance scheme. The case is set to start at the NSW Federal Court on June 14. Meanwhile, GE Capital Australia and New Zealand has sold its $5 billion mortgage book to non-conforming lender Pepper Australia for an undisclosed sum. Pepper was supported by a consortium of institutional banks and investors including Commonwealth Bank, NAB and Westpac.

Pharmaxis, Prima Biomed

There is also a fair bit of news on the pharmaceuticals sector, most notably the thrashing handed out to Pharmaxis by the market in the last session. Pharmaxis shares tumbled 74 per cent on the news that its drug Bronchitol, designed to improve lung function in people suffering from cystic fibrosis, had been rejected by Europe's 27-nation Committee for Medicinal Products for Human Use. The market's reaction to the refusal was fierce hence the sinking share price but one person who escaped the carnage was Pharmaxis' chief executive Alan Robertson who rather fortuitously sold a parcel of 500,000 shares a day before the European decision was handed down. Robertson sold the shares at $2.95 each to net $1.475 million, not bad given that Pharmaxis ended the session at 76 cents. Pharmaxis was at pains to point out yesterday that the sale had been made to pay a $1.35 million tax liability, due by June 6, after he exercised 1.12 million options in Pharmaxis at 12.5 cents in November 2009 when it was trading at $2.73. Elsewhere, Prima Biomed, the cancer therapy outfit chaired by opposition communications minister Malcolm Turnbull's better half, Lucy, is looking to raise $38 million to fund late stage trials of its CVac ovarian cancer vaccine. The capital raising includes a placement to institutional and sophisticated investors of about 64.3 million shares at 28 cents per share, to raise about $18 million, and a share purchase plan at 28 cents a share to existing shareholders of up to $15,000 of shares per shareholder. The raising is being led by Deutsche Bank and Ord Minnett.

Wrapping up

Mining personalities dominated the top 5 of the latest BRW rich list 200 and it's Gina Rinehart who has taken out the top spot for the first time in the list's history. Not only is Rinehart the first woman to top the list, her $10.3 billion fortune is the largest yet recorded in Australia. It's been an astronomical rise even by the standards of mining magnates given that Rinehart's fortune stood at around $4.75 billion last year and it's only set to get larger once her company Hancock Prospecting sells the coal tenements in the Galilee to India's GVK for a couple of billion dollars. Interestingly, for a person who is notoriously media shy Rinehart has been hitting the headlines a lot in the last six months or so and given her recent interests in the media sector and her ever burgeoning coffers, one wonders what next lays in store for the richest Australian ever. The person just sitting below Rinehart is Glencore's boss Ivan Glasenberg, who was born in South Africa and lives in Switzerland but qualifies for the list thanks to his Australian citizenship. Glassenberg must be happy with his position but had some other things on his mind after a rather lacklustre debut by Glencore on the Hong Kong market falling 2.85 per cent on its first day. The weakness was attributed to the broader fall in commodities prices and Glasenberg was quick to point out to the media that the overall outlook for commodities was better than it has ever been. Meanwhile, fellow rich-lister Clive Palmer's Resourcehouse has delayed its listing plan by three days and will now open its retail tranche next week. Finally, China's Yanzhou Coal Mining may have missed out on Whitehaven Coal but the coal giant evidently has some big plans for its Australian unit, Yancoal Australia, which runs the mines acquired from Felix Resources, with a partial float of the business reportedly on the cards. Yancoal has told Bloomberg that its parent is hoping to raise more than $1 billion in a float of at least a third of Yancoal. The rumblings of a float are not really a surprise given that the asset has to be listed by the end of next year, according to the agreement struck between Yanzhou and Canberra when Yanzhou acquired Felix in 2009. With the Whitehaven acquisition out of the picture the plans to push through with what could be biggest float in the local market since QR National may have been brought forward a touch. Elsewhere, Carsales.com has announced an on-market share buyback of up to 10 per cent of its issued capital, worth $105.8 million. The online classifieds company said the buyback would be based on yesterday's closing price of $4.60 and will run over a 12 month-period, starting on June 9.