BREAKFAST DEALS: Barangaroo banter

James Packer's still to decide how he'll fund his latest projects, while all eyes are on Kerry Stokes' Seven Group.

Another day, another giant deal for Crown's James Packer. As the ink dries on the mogul's latest Barangaroo agreement, talk has shifted to funding – word is, Crown has a sizeable hybrid issue on the way. Elsewhere, News Limited will be watching Kerry Stokes, and Bain Capital might take a look at Billabong.

Crown, Lend Lease

Fresh from successful negotiations with the West Australian government, James Packer has secured Crown a spot at Lend Lease's prized Barangaroo development by Sydney Harbour. Now he needs to decide how to fund his grand plans.

News Limited's potential purchase of Packer's 50 per cent stake in Consolidated Media Holdings would help (more on that below), but he's apparently chasing funds in the interim. The Australian Financial Review reports Crown is preparing to announce a hybrid issue worth as much as $500 million.

The casino operator is said to be hammering out the finer details now, alongside advisers Deutsche Bank, ANZ Banking Group, National Australia Bank and UBS. An announcement about the company's capital management options could come as soon as today.

This of course follows news that Lend Lease has agreed to allow Crown to build its third luxury hotel at the Barangaroo site, modelled the casino operator's flagship facility in Melbourne.

While both companies were upbeat about the deal, Packer has made clear the plan would only proceed if he is granted approval to build a casino at the development. As he put it in a statement yesterday: "…a VIP gaming facility would be necessary to provide the commercial underpinning for any development and for the operation of a world class six star hotel resort."

For that, he'll require the cooperation of the state government, and Echo Entertainment, which currently owns exclusive casino rights in the city.

News Corporation, Consolidated Media Holdings, Seven Group

Meanwhile, all eyes are on Kerry Stokes' Seven Group after rival media giant News Limited won regulatory approval to proceed with a proposed $2 billion takeover of pay-TV group Consolidated Media Holdings.

Seven, itself considering buying the 76 per cent of ConsMedia it doesn't already control, is waiting for its own ruling from the Australian Competition and Consumer Commission, which has asked for more information about the takeover proposal. The regulator is believed to be concerned the combination of Stokes' free-to-air assets with ConsMedia's cable businesses could give the the merged entity an anticompetitive edge.

ConsMedia owns a 50 per cent stake in Fox Sports and 25 per cent of Foxtel.

News Limited received its tick from the ACCC because it already owns the other half of Fox Sports and a further 25 per cent of Foxtel, where it controls management. The ACCC decided a takeover of ConsMedia by News wouldn't come as a great change

For now, the $3.50-a-share takeover proposal is still conditional and non-binding.

For a formal bid to be successful, News Corporation's Australian branch would need to win over the Foreign Investment Review Board and ConsMedia investors, including Stokes.

Given Stokes' clear interest in ConsMedia, strategic or otherwise, he probably won't relinquish his existing 24 per cent stake quietly, or cheaply.

Bain Capital, Billabong International, TPG

In other takeover news, there appears to be hope yet that Billabong International will receive a higher bid than the $695 million TPG is offering.

The Australian Financial Review reports another private equity group, Bain Capital, has informally expressed an interest in Billabong to Goldman Sachs, which is advising on the sale. The high-profile Bain, once headed by US presidential candidate Mitt Romney, is apparently "actively weighing its options".

It's all very speculative at the moment, but Billabong is undoubtedly hoping new bidders will emerge. It has made clear its view that TPG's offer undervalues the business, and has announced all talks with its suitor are non-exclusive.

The release of Billabong's full-year results on August 27 could be the catalyst other potential buyers are waiting for.

Emirates, Qantas

New details have emerged about a planned alliance between Qantas Airways and Emirates, which probably won't run as deep as some have speculated.

Emirates chairman Shiekh Ahmed bin Saeed al-Makrourn told Bloomberg the two carriers were making progress on a code share agreement, which could be sealed in six months. However, a larger-scale revenue-sharing deal is not in the cards.

"We’ve been engaging with them for some time,” Sheikh Ahmed told the news service yesterday. "The objective is to eventually see Qantas fly through Dubai.”

It's unclear where a simple code share would leave Qantas' relations with its current joint venture partner, British Airways. If Dubai were to become a new Qantas hub for entry into Europe, it may divert traffic from the so-called Kanagaroo route to London, which Qantas operates with BA.

Wrapping up

The sale of Darrell Lea may have run into some trouble, with news the chocolate retailer's administrator has shut half its stores to make it more attractive to potential buyers.

Administrator Mark Robinson, of PPB Advisory, has closed 32 of the company's 64 stores and fired about 200 staff.

The news comes as The Australian FInancial Review reports speculation that the number of parties interested in the Darrell Lea business has dropped to two, from seven a week earlier.

For what it's worth, Robinson, who has been searching for a buyer since Darrell Lea collapsed into administration last month, maintains that he is engaged with "a number" potential purchasers.

Not long ago, while commodities prices were still near their peaks, a mining takeover offer would rise and rise until its target deemed it reasonable. Now, as metals crash through price floors, the opposite seems true.

Sundance Resources is case in point. The local miner has confirmed it's in talks with China's Hanlong Mining about accepting a lower buyout bid, after Chinese regulators said the deal could only proceed with a "reasonable acquisition" pricetag.

The bid currently stands at 57 cents a share, valuing Sundance at about $1.7 billion. There's speculation Hanlong might drop it back to 50 cents, in line with an initial offer Sundance rejected as being too low just 12 months ago.

The Australian understands Sundance has given Hanlong until the weekend to settle on a renegotiated price. The newspaper says it's highly unlikely that a price below 50c a share will be accepted.

Sundance shares, which have been suspended since Tuesday, last traded at 33 cents.

Finally, DuluxGroup's fight for control over Alesco has become even snarkier, as the paints group makes its own application to the Takeovers Panel to keep its target form "misleading" investors about the proposal.

The action is in response to Alesco complaining to the Panel that Dulux has overstated its bid, which the suitor says represents total potential value of $2.23-a-share – including $2.05 cash and 18 cents in franking credits.

Dulux claims Alesco incorrectly told the media the bid had been reduced to $1.90 per share. Dulux wants Alesco to clarify to shareholders the price being offered, and for it to be prohibited from making further statements about the deal without Panel consent.

Stay tuned for a fiery rebuttal from Alesco.

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