BREAKFAST DEALS: Alesco all-in?

DuluxGroup and Alesco Corporation came to a takeover agreement in the fashion that we've come to expect – one with caveats. Also in this morning's edition, the Future Fund doesn't want to be counted out of a NSW asset sale that's keeping foreign sovereign wealth funds interested. Meanwhile, Sundance is still waiting by the letterbox, Fed chairman Ben Bernanke provides the cover for an Aussie gold merger and a question lingers from Nine Entertainment's discussion with lenders.

DuluxGroup, Alesco Corporation

The most frustrating Australia takeover battle of 2012, for all parties concerned, appeared to come to an end of sorts last week with news that the Alesco Corporation board would unanimously recommend a $210 million takeover offer from DuluxGroup.

The two companies have agreed that Alesco may pay its shareholders an additional special dividend of up to 27 cents a share, subject to a favourable ruling from the Australian Taxation Office and Dulux achieving 90 per cent acceptances.

We'll have to wait to see what happens on the tax ruling, but the acceptances condition shouldn't be too much of a problem.

Dulux already has acceptances of 55.7 per cent, much of which is made up by its own shareholding and the acceptances from institutional shareholders. With retail investors making up the bulk of Alesco's remaining, uncommitted shareholders, a board recommendation should quickly bump up that figure closer to 90 per cent.

True to form, the Alesco board wasn't entirely forthcoming with its recommendation.

"Your board's view is that the decision as to whether or not to recommend DuluxGroup's offer is finely balanced,” Alesco chairman Mark Luby said in a statement released on Friday.

"We have consistently said that the offer undervalues Alesco.”

If Alesco had come out and wholeheartedly thrown its support behind the Dulux offer, the target's shareholders would have asked why the board risked letting the deal fall over altogether by the vigour with which it dealt with the Dulux approach.

Future Fund, Port Botany

The NSW asset privatisation narrative has consistently reminded Australian business media consumers that global pension funds have a keen interest in securing government infrastructure assets.

This morning The Australian reminds its readers that our own Future Fund is not different.

According to the newspaper, the Future Fund is set to join one of the consortiums bidding for the port, which is expected to go for $2 billion. Morgan Stanley is running the sale.

The Future Fund has money tied up with Global Infrastructure Partners and Citi Infrastructure, which are both engaged in different consortium discussions.

It'll be interesting to see what side the Fund pops up on.

Sundance Resources, Sichuan Hanlong Mining

On the best of days, Sundance Resources shareholders hope for a clarifying statement from their iron ore company.

Late last week, Sundance went into a trading halt pending an announcement – one can only assume that it's about a letter.

Today is the day Sundance was supposed to have a letter from bidder China Sichuan Hanlong Mining indicating that it had effectively secured financing from state-owned China Development Bank.

The $1.37 billion takeover has always hinged on the conditionality of the deal. Sundance had to win approval from the governments of Cameroon and the Republic of the Congo for its Mbalam iron ore project, which straddles the two countries. Hanlong had to find the cash.

While Sundance had kept up its end of the bargain, Hanlong has always struggled to portray enough confidence that it can get China Development Bank onside. The renegotiations on the price of the deal didn't help either.

That's why the stock has always traded at a discount. Sundance shares last changed hands at 34 cents, despite a 45 cents deal.

Cortona Resources, Unity Mining

Two Australian gold miners are picking the right time to merger, under the cover of stimulus measures from the US Federal Reserve.

Unity Mining and Cortona Resources announced on Friday of their intention to merge in an all scrip deal that will see Cortona shareholders receive 0.734 Unity shares for each piece of stock they hold.

The result will be a $90 million player with an operating mine in Tasmania (Unity's Henty site) and an undeveloped growth project (Cortona's Dargues Reef).

Scrip deals have dried up big time in the current environment as shareholders scream for cash in uncertain time. Put simply, they're not bullish on anyone else's stock.

But these two miners have picked a good time to join forces without the need of dipping into precious cash reserves.

The Federal Reserve is pumping money into the US economy with an open-ended policy to buy tens of billions in mortgage-backed securities every month, which has got the market talking about another period where gold could test records.

Nine Entertainment, CVC Asia Pacific, Apollo Global Management, Oaktree Capital

The final touches have been put on the sale of ACP Magazines to Germany's Bauer Media and the $525 million deal has been signed off on.

However, The Australian reports that no new meetings have been scheduled between Nine's owner CVC Asia Pacific and the main senior lenders, Apollo Global Management and Oaktree Capital.

The proceeds from the sale have gone some way towards changing the nature of discussions between CVC and its mezzanine lender Goldman Sachs, and the hedge funds.

But one question that this column would really like to see answered is what did CVC tell the hedge funds in relation to questions about the unsuccessful sales process it ran earlier this year.

Breakfast Nine will remember clearly that Nine was shopped around to a number of potential players, ranging from Telstra Corporation to Hollywood tycoon Harry Sloan.

In the end, the talks amounted to nothing. The inference was that the offers weren't going to compare to the $2.9 billion in senior debt that the company was battling.

Then the ACP sale came along. Remember that the pricetag associated with the sale surprised some in the market to such a degree that a number of other potential media sales got a second look.

Did the ACP sale do more than reduce the amount of debt that CVC had to cover, but encourage Goldman that the broader valuations of Nine were greater than what would have been the case six months ago?

Wrapping up

While a number of opportunists, mostly likely based in Asia, pour over the scraps lefts behind by Gunns Limited, the fallen company's shareholders aren't likely to receive a whole bunch.

While talking to ABC TV's Inside Business program yesterday, Gunns receiver Mark Korda of KordaMenta was asked if Gunns had lost all the shareholders' money.

Korda replied rather simply: "My prognosis is ‘yes'”.

Echo Entertainment chairman John O'Neill launched a staunch defence of his company's position after the announced departure of long-time board member Brett Paton and chief executive Larry Mullins at a time when the company is being stalked by gaming billionaires James Packer and KT Lim.

''There is no chaos around the board table. We certainly need to augment the board,'' O'Neill said.

The events of the last week at Echo could go a long way towards shaping the minds of shareholders when it comes to what's best for the company over the long haul – going it alone or teaming up with Packer in some way.

And finally, The Australian Financial Review has picked up on comments from Norwegian giant Statoil, indicating that it's looking for a second shale gas partner in Australia.

With this in mind, keep an eye on Beach Energy. The pair is understood to have conducted discussions earlier this year.