BREAKFAST DEALS: Barminco bruiser
Barminco pulls its IPO plans, while Telstra's John Stanhope signs off after forty-four years.
Another planned IPO bites the dust, with underground mining contractor Barminco postponing its $545 million float, as investors show little appetite for risk, especially if it involves private equity. Barminco has the right ingredients so it could still revisit the IPO road when conditions are better, provided it doesn't get picked up in the interim. Meanwhile, Telstra CFO John Stanhope signs off on a 44-year career and tells shareholders that the telco has got the best possible NBN deal, IAG and NRMA hose down talks of a feud and News Corporation sells MySpace for peanuts. Elsewhere, Nathan Tinkler fails to come up with the goods in time for Newcastle Knights and the London and Toronto exchanges abandon their merger plans.
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Barminco, Gresham Private Equity, Ausdrill
.
West Australian underground mining contractor Barminco had to bite the bullet yesterday and pull its $545 million float after running a creditable IPO race. The end result was predictable, given the volatility in the markets and the simple fact that investors just don't have the appetite for risk, especially when private equity is involved. Barminco, which is 70 per cent owned by Gresham Private Equity, appointed Goldman Sachs and Gresham Advisory Partners to run the IPO – and it would seem that despite grabbing the attention of investors at home and overseas the two couldn't convince them to sign up. The pricing was reportedly set at $2.02-$2.22 but investors were apparently only willing to come in under the sale price of 10 times expected earnings. The vendors, including Barminco founder Peter Bartlett, who holds a 30 per cent stake, were not willing to make a deal at that price, hence the postponement. So there you have it: another IPO bites the dust, albeit temporarily, which makes container group Royal Wolf's $US96 million float in May the biggest float of the year. Royal Wolf's IPO was the best of the nine IPOs this year and there's a good reason for these dire numbers. As one small caps fund manager told The Australian Financial Review, there's simply too many beaten down stocks already available to the investors in the market, and they're stocks that come with a track record. That is not to say Barminco doesn't have what it takes, with many fund managers pointing to its solid management and strong order book. So the company will inevitably try its luck when conditions are a bit better. The one unknown between now and then is whether the trade sale option gains any traction. The likes of Ausdrill and Redpath have been touted previously as buyers but the hitch, especially for Ausdrill, has been the asking price. Ausdrill and Barminco already run a joint venture in Africa and Ausdrill founder Ron Sayers is a close friend of Bartlett. It will be interesting to see whether Bartlett and Gresham Private Equity will look to revive the trade sale option or bide their time. For the time being, the market can look forward to the mooted $250 million float of local fast-food group Collins Foods, which manages KFC and Sizzler restaurants, and is owned by private equity firm Pacific Equity Partners. Deutsche Bank and UBS have been appointed as joint lead managers to run the IPO.
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Telstra, John Stanhope
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Telstra's veteran chief financial officer and long-standing pillar of the telco's management team, John Stanhope, has decided to hang up the phone now that the national broadband network deal talks with the federal government have been wrapped up. There is, of course, still the issue of what Telstra shareholders have to say on the deal and Stanhope wasted no time yesterday in reminding them that the telco has got the best possible deal from the rigorous NBN talks. The outgoing CFO told The Australian that shareholders should keep in mind that they will be casting their vote not on the on the merits of the NBN but on the quality of the deal Telstra has signed with the government. Meanwhile, Telstra said it has begun the process of finding Stanhope's successor, with Egon Zehnder working with the company. The telco's deputy CFO, Mark Hall, is the obvious home grown replacement but there are some who reckon that head of strategy and former St George Bank boss Paul Fegan may also be in the running.
.
NRMA, IAG
.
So was it a storm in a teacup or are things not quite cosy between siblings Insurance Australia Group and NRMA Motoring and Services? That's the question a lot of IAG shareholders will still be asking after the insurer failed to clarify why NRMA had sold more than 13 million IAG shares. While IAG did not release any statements to the market, the insurer and NRMA did come out with a joint statement that confirmed the share sale but also hosed down any talk of rift. In fact, NRMA chairman Wendy Machin has gone so far as to label the speculations of a crisis as mischief carried out by the media. Machin has told The Sydney Morning Herald that the meeting with IAG's management was a routine engagement and the decision to sell the substantial chunk of shares was based on the simple premise that it was overweight on IAG stock, which has been on the nose in recent times. So according to Machin, the decision to offload was a commercial one and it's business as usual. However, the talk has given the necessary fuel to former NRMA director and renowned detractor of the demutualisation, Richard Talbot, to renew his call for IAG and NRMA to part ways. Talbot has told the media that the demutualisation deal was always tipped in favour of IAG and there is resentment within NRMA about IAG profiting from NRMA's brand.
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News Corp, Myspace, Foxtel, Austar, Ten Network Holdings
.
Moving to the media sector, Rupert Murdoch's News Corporation has closed the book on the tortured sale process of MySpace, with the social networking website to be sold for a fraction of the $US580 million Murdoch paid in 2005. MySpace has been sold to online advertising targeting company Specific Media for $US35 million. Under the terms of the deal, News Corp will take a minority stake in Specific and also retain a small stake in the social network. The $US35 million price tag is a lot lower than the $US100 million News Corp was pushing for earlier this year. The good news for News Corp is that it can now move on with life, but spare a thought for MySpace's workforce, which is going to get chopped by 50 per cent as the new owners settle in. Moving to Murdoch junior, it looks like Ten Network Holdings' temporary boss Lachlan Murdoch is on the warpath when it comes to cutting costs, with retrenchments reportedly set to start as early as next week. According to the AFR, about 8 per cent of the network's staff are set to get the sack. That's about 100 or so jobs, with the majority of them to be lost from the news department. Meanwhile, regional pay TV operator Austar's largest shareholder and Liberty Global founder John Malone will reportedly abstain from voting his controlling stake as shareholders meet to vote on Austar's $1.9 billion merger with Foxtel. The deal is subject to minority shareholder approval, however it would seem that Liberty will not need to vote on its 54 per cent stake. According to The Australian, the deal will be structured to minimise Liberty's tax bill and will essentially see it buy out the minority shareholders of Austar at $1.52 a share, before selling the whole lot to Foxtel.
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Nathan Tinkler, Newcastle Knights
.
Nathan Tinkler's plans to fully take the reins of his beloved rugby league club, Newcastle Knights, has hit a slight snag, with the mining magnate reportedly unable to come up with the $20 million bank guarantee to complete the takeover before the June 30 deadline. Tinkler's Hunter Sports Group outfit, which has already started running the club's management, has reportedly asked for more time from Knights officials and said in a statement that the delay was caused by issues outside of its control. Now, failing to come up with a $20 million guarantee can be seen by some as an affront to the prestige of the self-made billionaire but the bulk of Tinkler's wealth is currently tied up in Aston Resources and his Patinack Farm horseracing empire. According to the AFR, both assets are heavily mortgaged. Hunter Sports Group is confident that the deal will go ahead, once Knights members agree to offer Tinkler the necessary extension.
.
Wrapping up
.
We start with overseas news, where another big bourse merger has fallen in a heap, with the London and Toronto stock exchanges abandoning their plans for a $C3.6 billion tie-up. The failed bid now opens the door to a hostile $C3.8 billion offer from Canada's Maple Group consortium. It also leaves London Stock Exchange open as a possible target in the wave of consolidation sweeping the industry. The Nasdaq OMX Group is already being touted as a possible suitor and it shouldn't be long before analysts start running some numbers on whether an ASX-LSE merger is a good fit. Meanwhile, Centro Properties Group chairman Paul Cooper and non-executive director Jim Hall have reiterated that they will continue to sit on Centro's board despite the Federal Court ruling earlier this week. The court found that Cooper and Hall had failed in their duties as directors but Centro said in a statement that its board's special matters committee believes that Cooper and Hall should continue to serve in their existing capacities on the board. Elsewhere, accounting firm KPMG has unveiled its new Australian chairman, with Peter Nash taking over from Michael Andrew. According to The Australian, Nash's 3-year term is scheduled to begin on August 8. Back in the property sector, billionaire property developer Lang Walker has reportedly put a $280 million Canberra office building on the market, while construction giant Leighton Holdings has increased its stake in property developer Devine from 49.66 per cent to 50.06 per cent. According to Leighton, the move is designed to support Devine's strategy of developing residential properties in key growth corridors in Brisbane, Melbourne and Adelaide.
.
Barminco, Gresham Private Equity, Ausdrill
.
West Australian underground mining contractor Barminco had to bite the bullet yesterday and pull its $545 million float after running a creditable IPO race. The end result was predictable, given the volatility in the markets and the simple fact that investors just don't have the appetite for risk, especially when private equity is involved. Barminco, which is 70 per cent owned by Gresham Private Equity, appointed Goldman Sachs and Gresham Advisory Partners to run the IPO – and it would seem that despite grabbing the attention of investors at home and overseas the two couldn't convince them to sign up. The pricing was reportedly set at $2.02-$2.22 but investors were apparently only willing to come in under the sale price of 10 times expected earnings. The vendors, including Barminco founder Peter Bartlett, who holds a 30 per cent stake, were not willing to make a deal at that price, hence the postponement. So there you have it: another IPO bites the dust, albeit temporarily, which makes container group Royal Wolf's $US96 million float in May the biggest float of the year. Royal Wolf's IPO was the best of the nine IPOs this year and there's a good reason for these dire numbers. As one small caps fund manager told The Australian Financial Review, there's simply too many beaten down stocks already available to the investors in the market, and they're stocks that come with a track record. That is not to say Barminco doesn't have what it takes, with many fund managers pointing to its solid management and strong order book. So the company will inevitably try its luck when conditions are a bit better. The one unknown between now and then is whether the trade sale option gains any traction. The likes of Ausdrill and Redpath have been touted previously as buyers but the hitch, especially for Ausdrill, has been the asking price. Ausdrill and Barminco already run a joint venture in Africa and Ausdrill founder Ron Sayers is a close friend of Bartlett. It will be interesting to see whether Bartlett and Gresham Private Equity will look to revive the trade sale option or bide their time. For the time being, the market can look forward to the mooted $250 million float of local fast-food group Collins Foods, which manages KFC and Sizzler restaurants, and is owned by private equity firm Pacific Equity Partners. Deutsche Bank and UBS have been appointed as joint lead managers to run the IPO.
.
Telstra, John Stanhope
.
Telstra's veteran chief financial officer and long-standing pillar of the telco's management team, John Stanhope, has decided to hang up the phone now that the national broadband network deal talks with the federal government have been wrapped up. There is, of course, still the issue of what Telstra shareholders have to say on the deal and Stanhope wasted no time yesterday in reminding them that the telco has got the best possible deal from the rigorous NBN talks. The outgoing CFO told The Australian that shareholders should keep in mind that they will be casting their vote not on the on the merits of the NBN but on the quality of the deal Telstra has signed with the government. Meanwhile, Telstra said it has begun the process of finding Stanhope's successor, with Egon Zehnder working with the company. The telco's deputy CFO, Mark Hall, is the obvious home grown replacement but there are some who reckon that head of strategy and former St George Bank boss Paul Fegan may also be in the running.
.
NRMA, IAG
.
So was it a storm in a teacup or are things not quite cosy between siblings Insurance Australia Group and NRMA Motoring and Services? That's the question a lot of IAG shareholders will still be asking after the insurer failed to clarify why NRMA had sold more than 13 million IAG shares. While IAG did not release any statements to the market, the insurer and NRMA did come out with a joint statement that confirmed the share sale but also hosed down any talk of rift. In fact, NRMA chairman Wendy Machin has gone so far as to label the speculations of a crisis as mischief carried out by the media. Machin has told The Sydney Morning Herald that the meeting with IAG's management was a routine engagement and the decision to sell the substantial chunk of shares was based on the simple premise that it was overweight on IAG stock, which has been on the nose in recent times. So according to Machin, the decision to offload was a commercial one and it's business as usual. However, the talk has given the necessary fuel to former NRMA director and renowned detractor of the demutualisation, Richard Talbot, to renew his call for IAG and NRMA to part ways. Talbot has told the media that the demutualisation deal was always tipped in favour of IAG and there is resentment within NRMA about IAG profiting from NRMA's brand.
.
News Corp, Myspace, Foxtel, Austar, Ten Network Holdings
.
Moving to the media sector, Rupert Murdoch's News Corporation has closed the book on the tortured sale process of MySpace, with the social networking website to be sold for a fraction of the $US580 million Murdoch paid in 2005. MySpace has been sold to online advertising targeting company Specific Media for $US35 million. Under the terms of the deal, News Corp will take a minority stake in Specific and also retain a small stake in the social network. The $US35 million price tag is a lot lower than the $US100 million News Corp was pushing for earlier this year. The good news for News Corp is that it can now move on with life, but spare a thought for MySpace's workforce, which is going to get chopped by 50 per cent as the new owners settle in. Moving to Murdoch junior, it looks like Ten Network Holdings' temporary boss Lachlan Murdoch is on the warpath when it comes to cutting costs, with retrenchments reportedly set to start as early as next week. According to the AFR, about 8 per cent of the network's staff are set to get the sack. That's about 100 or so jobs, with the majority of them to be lost from the news department. Meanwhile, regional pay TV operator Austar's largest shareholder and Liberty Global founder John Malone will reportedly abstain from voting his controlling stake as shareholders meet to vote on Austar's $1.9 billion merger with Foxtel. The deal is subject to minority shareholder approval, however it would seem that Liberty will not need to vote on its 54 per cent stake. According to The Australian, the deal will be structured to minimise Liberty's tax bill and will essentially see it buy out the minority shareholders of Austar at $1.52 a share, before selling the whole lot to Foxtel.
.
Nathan Tinkler, Newcastle Knights
.
Nathan Tinkler's plans to fully take the reins of his beloved rugby league club, Newcastle Knights, has hit a slight snag, with the mining magnate reportedly unable to come up with the $20 million bank guarantee to complete the takeover before the June 30 deadline. Tinkler's Hunter Sports Group outfit, which has already started running the club's management, has reportedly asked for more time from Knights officials and said in a statement that the delay was caused by issues outside of its control. Now, failing to come up with a $20 million guarantee can be seen by some as an affront to the prestige of the self-made billionaire but the bulk of Tinkler's wealth is currently tied up in Aston Resources and his Patinack Farm horseracing empire. According to the AFR, both assets are heavily mortgaged. Hunter Sports Group is confident that the deal will go ahead, once Knights members agree to offer Tinkler the necessary extension.
.
Wrapping up
.
We start with overseas news, where another big bourse merger has fallen in a heap, with the London and Toronto stock exchanges abandoning their plans for a $C3.6 billion tie-up. The failed bid now opens the door to a hostile $C3.8 billion offer from Canada's Maple Group consortium. It also leaves London Stock Exchange open as a possible target in the wave of consolidation sweeping the industry. The Nasdaq OMX Group is already being touted as a possible suitor and it shouldn't be long before analysts start running some numbers on whether an ASX-LSE merger is a good fit. Meanwhile, Centro Properties Group chairman Paul Cooper and non-executive director Jim Hall have reiterated that they will continue to sit on Centro's board despite the Federal Court ruling earlier this week. The court found that Cooper and Hall had failed in their duties as directors but Centro said in a statement that its board's special matters committee believes that Cooper and Hall should continue to serve in their existing capacities on the board. Elsewhere, accounting firm KPMG has unveiled its new Australian chairman, with Peter Nash taking over from Michael Andrew. According to The Australian, Nash's 3-year term is scheduled to begin on August 8. Back in the property sector, billionaire property developer Lang Walker has reportedly put a $280 million Canberra office building on the market, while construction giant Leighton Holdings has increased its stake in property developer Devine from 49.66 per cent to 50.06 per cent. According to Leighton, the move is designed to support Devine's strategy of developing residential properties in key growth corridors in Brisbane, Melbourne and Adelaide.
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