BREAKFAST DEALS: Amcor advance

Amcor is in the box seat for another packaging acquisition, while Optus gears up for a 4G battle.

When Amcor picked up the Alcan Packaging business in the wake of the global financial crisis, many questioned whether this was a move that spoke of great opportunism or recklessness in a time of uncertainty and fear. It turns out it was the former. As the company’s takeover appetite is finely tuned, investors are wondering whether it’s close to securing flexible packaging group Aperio and a report indicates this is probably the case. Meanwhile, Optus has won an important victory in the race to challenge Telstra as the 4G provider of choice. Elsewhere, Billabong International will be counting its lucky stars that TPG Capital still wants it, but does the clothing company want to go for just $3 a share? And finally, FLSmidth could be up for compensation to Ludowici shareholders if the Takeovers Panel takes issue with them, while talkback radio host Alan Jones makes a stand against coal at the site of an asset Robert Millner hopes to offload.

Amcor, Aperio Group, Pro-Pac Packaging

Australian packaging giant Amcor might be in the box seat to pick up flexible packaging company Aperio Group for something in the order of $300 million, but it wasn’t giving anything away during yesterday’s results. The Australian Financial Review brings word that Amcor is in final negotiations, with a ruling from the Australian Competition and Consumer Commission tipped for Thursday.

This might be disappointing news for Raphael Geminder, son-in-law of the late packaging billionaire Richard Pratt, who was said to also be interested in Aperio through his company Pact Group. But it’s not as if Aperio is the only target of Geminder. According to The Australian, Geminder is funding a large component of the expansion plans for Pro-Pac Packaging. A $28 million share placement is on the cards, with Geminder taking up half of it.

Optus, Vividwireless

Optus has taken the fight up to Telstra Corporation over the emerging 4G mobile broadband market by purchasing Vividwireless from Seven West Media for $230 million. The Singapore-owned telecommunications company will pick up 98MHz of spectrum in the 2.6GHz band – in layman's terms it’ll mean faster mobile broadband speeds for its customers. At the moment Telstra has a superior network and is leveraging that to secure customers from companies and private homes. It’s thought that Optus paid a premium for Vividwireless, but the extra cash will be worth it.

Billabong International, TPG Capital

Clothing company Billabong International has received some welcome news from private equity suitor TPG Capital – they’re still interested in a $3 bid, even without that 48.5 per cent stake in Nixon. Billabong received the proposal from TPG on Wednesday last week, two days before it was scheduled to announce the stake sale and closure of 100-odd stores from its retail network. Given that the asset sale and closure stemmed from a review that’s been on the go for months and asset sales violated one of the conditions of TPG’s initial approach, Billabong chairman Ted Kunkel was in an uncomfortable position.

Thankfully, TPG have put things at ease by effectively giving their blessing to the proposal and reissuing their $3 per share proposal, valuing the company at $766 million. It shows a degree of flexibility that private equity isn’t exactly known for, probably because it doesn’t require an increase in price. With this in mind, the Billabong offer is low ball, with the company’s stock trading at $4 in December and above $8 just 12 months ago. Billabong might be able to put a case to investors that the company is worth more than $3 a share, but whether they can convince the register that existing management can rekindle the stock price is another matter.

Ludowici, FLSmidth, Weir Group

The decision by the Takeovers Panel to allow – for the moment – Danish group FLSmidth to increase its offer for local engineering group Ludowici is a curious move when it might reverse the decision later on. As is well known by now, FLSmidth chief executive Jorgen Huno Rasmussen made a comment to a newswire that quite possibly constitutes a best and final statement under Australian takeovers law.

Weir Group has since bettered FLSmidth’s offer, which the Danish group then countered. The question begs, if the Takeovers Panel ultimately rules against FLSmidth, which it’s expected to meet on in coming days, what happens to local investors? A report in the Australian Financial Review indicates that shareholders could be entitled to up to $4 million in compensation, depending on whether the panel adheres to precedent.

New Hope

New Hope chairman Robert Millner is having a hard time of it trying to sell the company for something north of $5 billion. Last week it was reported by Reuters that the company had lost a Korean consortium from the bidding process. Sources indicated to the newswire that the sales process remains on track, although the deadline for bids appears to have shifted from late February to early March.

In the midst of all this, New Hope has had to watch as the loading facility for its prized Acland mine has been blocked by protesters, led by talkback radio personality Alan Jones. Jones addressed a crowd of 100 people objecting and told the crowd that Campbell Newman would block the stage three expansion of the site if the Liberal Nationals defeat Anna Bligh’s Labor government at the upcoming election. Given that one mooted proposal to speed up the sales process was to hive off Acland separately – and having been dubbed a "disgrace” by Jones – it wasn’t a great day for Millner.

OZ Minerals

Still in mining, OZ Minerals boss Terry Burgess knows this year he’ll have to deploy the company’s war chest to make a headliner acquisition – investors want him to spend money. Given that most expect a significant purchase that drives the next chapter of the miner’s future, once the Prominent Hill copper-gold mine takes a back seat, it’s probably a welcome thing that OZ has raised an extra $17.8 million by selling its Cambodian gold assets to Renaissance Minerals.

ANZ Bank

The bond issue renaissance now boasts one of its most ambitious works, with ANZ Bank tripling the size of its subordinated notes issue. The $500 million launch volume announced last week has now been raised to $1.5 billion. The issue unsurprisingly attracted strong demand from institutional and retail investors, the same demand that has seen the other banks, as well as AGL Energy, Origin Energy, Tabcorp and Woolworths, opt for similar moves.

Wrapping up

Leighton Holdings subsidiary Thiess has picked up more work, this time through a joint venture with EV LNG Australia. The pair have won a $500 million contract to construct storage tanks for the Wheatstone LNG project in Western Australian, which goes with the almost $2 billion worth of work that Thiess has secured over the last month or so. Meanwhile, The Australian reports that Canadian fund The Caisse de depot et placement du Quebec is partnering with Plenary Group over five public-private partnerships worth a total of $139.2 million.

In resources, Australian-listed Austin Exploration, which is about to welcome former Nexus Energy boss Richard Cottee as its chairman, is in a trading halt pending a capital raising announcement. Closer to home, NSW explorer NuCoal has agreed to cough up $76 million for a tenement near its Doyles Creek operation in the Hunter Valley, assuming a few conditions are satisfied. And finally, Gindalbie Metals has handed a $64 million contract for the Karara iron ore processing plant to Downer EDI.

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