DuluxGroup looks set to put the squeeze on Alesco, while the market waits for an update on Fortescue's debt covenants.

DuluxGroup is inching ever closer to a majority of target Alesco Corporation, which goes before shareholders today with a shaky looking remuneration report. Iron ore hopeful Western Desert Resources has joined Fortescue Metals Group in a trading halt following a takeover offer, while Andrew Forrest’s company looks for a less enticing solution. Elsewhere, Sonic Healthcare and Healthscope has seen the regulatory writing on the wall and given up NSW and the ACT for their deal, bigger numbers are being thrown around for Rip Curl and calls for a currency union between Australia and New Zealand gets a big cautionary note.

Alesco Corporation, DuluxGroup

Paints company DuluxGroup will try to tighten the screws on Alesco Corporation at the target’s annual meeting today.

According to a notice lodged by Dulux’s lawyers at Gilbert Tobin, Dulux has a 25.2 per cent relevant interest in Alesco, with another 21.7 per cent in the institutional acceptance facility. That’s almost 47 per cent of the register says yes to its $210 million offer.

The garage door maker has a few resolutions for investors pertaining to an issue that’s caused more than a few companies headaches this year – remuneration.

Dulux said in a notice to the ASX yesterday that it has lodged proxy votes opposing the remuneration report and the performance rights to Alesco managing director Peter Boyd.

Dulux has abstained from the resolution on the election of John Marley to the board, saying it doesn’t think casting votes would not be "appropriate” with a takeover offer on the table.

While it might look like a straight bat, Dulux goes straight on to say that it would reconfigure the board as soon as possible if it secures a majority.

Alesco has already indicated that there won’t be a change in its policy to reject Dulux’s offer at the annual meeting, which means that countdown to October 1 begins at the end of business today.

Dulux will go unconditional on that date, which means shareholders won’t get its improved dividend offer if the Alesco board doesn’t recommend the offer.

Western Desert Resources, Fortescue Metals Group

Two iron ore companies were in trading halts yesterday amid deals that reflected their contrasting fortunes.

Iron ore explorer Western Desert Resources is considering a conditional takeover for all its shares that it received over the weekend.

WDR shares finished trading last week at 85.5 cents apiece. The stock rallied from 63.5 cents a share on September 7, which might raise a few eyebrows.

However, it should be remembered that the news has been positive for China’s iron ore demand over the last week or so and this could easily explain WDR’s jump.

The Australian iron ore miner that hasn’t consistently benefited from that string of good news is Fortescue Metals Group, which is due to update the market today after having also entered a trading halt.

What the market can reasonably expect is news that its lenders have given Andrew Forrest some wiggle room on Fortescue’s covenants in order to sell some assets amid diminished iron ore prices. Investors are also facing a potential extension to the trading halt.

We’ll have to wait and see what Fortescue comes up with, but the company is staring at a litany of options to drag itself out of its debt problems.

Given that the iron ore miner will probably make an announcement within hours, we’ll leave the speculation until later.

With one exception – whatever happens, Forrest will only opt for an equity raising if he has no other options.

Sonic Healthcare, Healthscope

The consumer watchdog seems to have effectively blocked Sonic Healthcare’s acquisition of Healthscope’s pathology business in NSW and the ACT.

The two companies announced that they would attempt to do a deal on the Western Australian and Queensland networks worth about $47 million. This compares to the previous proposal including the other two territories, announced in May, for $100 million.

Since then the date at which the two companies wanted to have the deal completed has come and gone.

The Australian Competition and Consumer Commission said in August that it’s "preliminary view” was that the original structure could pose some competition problems for the eastern seaborne.

That included Queensland, so it appears that the healthcare operators have either received word that the sunshine state is no longer a concern for the ACCC, or it has a case to prove it shouldn’t be.

A completion date for the transaction has not been set – wise move.

Rip Curl

Australian surfwear Rip Curl may yet obtain a pricetag that reflects its legacy.

According to media reports some onlookers believe that Rip Curl could fetch up to $500 million. This is well ahead of the $300 million pricetag that The Australian Financial Review and Smart Company’s James Thomson believe is realistic, or the reported $400 million that Rip Curl itself is hoping for.

What really sets Rip Curl apart is that the company is undeveloped in emerging markets, whereas rival Billabong International, also in takeover calculations, is overcommitted in sluggish markets.

Rip Curl is getting interest from private equity players and potential trade buyers – dank!

Nine Entertainment, CVC Asia Pacific, Goldman Sachs

Goldman Sachs and the US hedge funds have about four weeks left to sort out their valuation differences over Nine Entertainment before receivership becomes a near certainty.

That’s the scenario outlined in The Australian this morning. The newspaper says that it would be "game over” by that stage because the window for a recapitalisation of the $2.8 billion debt will have closed.

The newspaper also reports that sources indicate that hopes of finding a strategic buyer have all but faded.

That second bit of news is not surprising. CVC has done its darnedest to find another interested party and names from Telstra Corporation to Hollywood highflyer Harry Sloan have popped up. Both nothing has come of it.

But if the rough four-week timeline turns out to be correct, the US hedge funds that have been pushing for a debt-for-equity swap that would wipe out CVC would begin negotiations again with receivers.

The ANZAC currency

The idea of giving the ANZAC spirit a monetary representation beyond a commemorative coin has been debated for years.

The move looks to be on the backburner for a while longer. The productivity commissions of Australia and New Zealand will release a discussion paper today explaining what we all know about currency unions by now – without political integration they give the participants less flexibility to manage their own economies.

It’s been suggested than an ‘ANZAC’ currency agreement could be structured in way that seeks to minimise the problems that the eurozone is currently going through.

But the size of the New Zealand economy compared to Australia’s would often mean that it’s saddled with an appreciated currency. While that might help encourage investment between the two countries, it’s a risk that Australia’s Trans-Tasman neighbours really need to consider.

Whatever the outcome of this proposal, this columnist dearly hopes that the currency is not named the ANZAC. Given the upheaval in Europe, branding a proposal such as this with the name that spiritually binds the two countries together feels too risky.

We need something not quite as sacred that binds the two nations together. The Bledisloe Cup springs to mind, or Phar Lap and Russell Crowe (both born in New Zealand, made famous in Australia).

Who would dare short the Rusty?

Wrapping up

Echo Entertainment has given a positive trading update on the first 10 weeks of fiscal 2013 as billionaire James Packer prepared to up his stake in the company.

When last we heard, Echo chief executive Larry Mullins said very preliminary discussions had taken place to find a solution that would benefit all shareholders.

This came in the wake of Packer’s pointed criticism of Echo, which had suffered a handful of controversies and problems with its high rollers.

Meanwhile, a spokesperson for Chinese whitegoods giant Haier has told The Australian that the divestment of Fisher & Paykal’s finance business would only occur after the $NZ869 million ($684 million) company is completed, if and when that happens.

And finally, the former boss of Allans, Billy Hyde, thinks a buyer can still be found for the business even though receivers are closing it down.

Reports have consistently linked private equity giant Bain Capital to Billy Hyde, but nothing’s been confirmed.

"We remain hopeful that there will be a credible buyer,” said John Helme to Fairfax. "With such an iconic business you have to question such a hasty decision.”

Helm used to manage Australian Music Group Holdings, the collapsed chain’s owner.


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