Breakfast Deals: ANZ's Indonesian ending?

Basel III rules may cause ANZ Bank to flog its Indonesian asset, while Australian banks want a piece of Lloyds’ local lending business.

ANZ Banking Group is reportedly in talks with a Japanese financial giant over its minority stake in Panin Bank as Basel III looms large. Meanwhile, Lloyds Banking Group’s Australian sale is apparently getting $1 billion offers and Stockland Group is offloading its FKP Property stake, although it could take quite a bit of time.

ANZ Banking Group, Panin Bank

It looks like the comments from ANZ Bank chief executive Mike Smith earlier this year about the potential consequences of Basel III capital and liquidity requirements weren’t in jest.

Reuters reports that Japan’s Mizuho Financial Group approached ANZ Bank last month about buying its 39 per cent stake in Indonesia’s seventh largest lender Panin Bank. Discussions are apparently ongoing over the stake, which is said to be worth about $600 million, but both banks have declined to comment.

Smith said back in April that the Basel III rules make the stake more costly to hold and that he would be open to selling it at the right price. He also said he’d be open to purchasing the rest of the company at the right price, but we’ll get to that in a moment.

Speculation about the Panin stake has been in the works for some time, thanks to Basel III. Under the new rules banks are required to take a 100 per cent deduction from Tier 1 capital for minority equity stakes. Previously, it was only 50 per cent.

It means that Smith and ANZ Bank, to bring the ‘Asia Pacific Superbank’ strategy full circle, will be more interested in majority owning existing banks, or building its own businesses from scratch.

For Panin, they’re terribly unlikely to get majority control. The powerful Gunawan family controls 46 per cent of Panin and has shown no real signs of wanting to give it up.

If Mizuho does succeed in securing control of the stake, the relationship between the Gunawan family and the new owners will make for interesting viewing. ANZ Bank’s relationship with them have been at times a little tense.

Lloyds Banking Group

Speaking of banks, Lloyds Banking Group has reportedly received indicative bids for its Australian finance and commercial lending business, worth more than $1 billion.

The Australian reports that a shortlist of potential buyers should be sorted later this month, with hopes of a deal by December.

ANZ Bank is getting amongst the action too – in fact, all the big Australian banks are. Reports indicate that Commonwealth Bank, National Australia Bank, Westpac and Macquarie Group have all thrown their hats in.

Stockland Group, FKP Property Group, Centuria Property Trust, Pacific Retail REIT

Stockland Group chief executive Mark Steinert has finally pulled the trigger on the sale of the company’s 14.9 per cent stake in FKP Property Group.

But the group can’t take the fast lane outta town. Stockland entered into an agreement in 2008 that restricts it from selling more than 3 per cent of FKP stock in any given month. So this will take at least five months to complete and that, by all signs, is a real stretch.

Steinert spoke yesterday of a “price sympathetic” exit, which probably means that this will be a drawn out process. What he is doing is giving investors a signal that one of the company’s most disappointing investment decisions is coming to an end.

He’s getting good press this morning for his remarkable turnaround efforts at Stockland.

While we’re in the sector, the breakthrough for the listed property industry looks to be finally coming.

Centuria Property Trust, headed by former Mirvac Group boss Nick Collishaw, will float on the Australian Securities Exchange on September 4, which is less than a month away.

Macquarie Capital, CIMB and RBS Morgans are apparently handling the float.

Supposedly there are also movements over at Pacific Retail REIT, with investment bank Moelis tipped to restart the bookbuild.

Just last week it looked like it was back to the drawing board after the initial $367 million bookbuild attracted bids of just $250 million.

Fairfax Media, InvestSMART, Waikato Times

Fairfax Media has sold two assets: the managed funds website InvestSMART has been sold to Australiasian Wealth Investments for $7 million cash six years after it was purchased for $12 million; the company also flagged the sale of the Waikato Times printing plant and offices in Hamilton, New Zealand.

“Following the Future of Financial Advice legislative reforms, Fairfax believes the sale of InvestSMART to a financial services provider makes sense so the business can continue to be developed for the benefit of its clients,” Fairfax said in a statement to the market.

Under the terms of the sale, Fairfax will continue to remain engaged with InvestSMART through display advertising on its website and promotions of its products and services through its client base.

All in all, it sounds like an alright deal, despite the contraction in the headline price.

Like all traditional newspaper companies, Fairfax has more important things to worry about – like when to stop printing.

There’s understandably been a lot of attention on News Corp (the owner of this website) and the renewed focus on Rupert Mudoch’s print assets due to the split from the profitable entertainment business 21st Century Fox.

Fairfax also has its hands full. Former sparring partner and would-be director Gina Rinehart remains the company’s largest shareholder and indicated her ongoing support for newspaper printing late last month.

Wrapping up

And finally, APN Property Group apparently has another suitor on the line for its self-storage fund.

After granting due diligence to what it described as a “highly credible party”, APN has told shareholders that a new player has expressed interest.

The Australian reports that could be a rival global player to Heitman, the company originally linked to the fund.

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