BREAKFAST DEALS: BHP nickel flip?

BHP Billiton may consider a float to buoy its floundering Nickel West division, while rumours of a News Ltd tilt at Ten appear fanciful.

As BHP Billiton talks up a potentially transformative nickel discovery in Western Australia, the miner appears to be getting closer to what could be the spin-off of the year. Elsewhere, it's unlikely News Limited will bid for Ten Network, but the ASX might still be searching for a suitor.

BHP Billiton

There's new talk about BHP Billiton's potential $3.9 billion spin-off of its lagging nickel division, after the miner revealed a major high-grade nickel discovery in Western Australia.

While the so-called Venus prospect is still in its early stages of delineation and development – meaning no guidance yet – a company spokesperson told The Australian the find had the potential "to reshape the profitability of the Nickel West business."

Unlike BHP's profitable Carro Matosa nickel operation in Colombia, Nickel West has suffered a double-whammy of lower nickel prices and a persistently high Australian dollar, culminating in a $US205 million loss for the December half.

BHP has "deprioritised" future investment in the businesses, but is said to be concerned about exiting in a trade sale while prices remain depressed. Analysts told The Australian the miner could circumvent the issue by spinning the division off to shareholders, with optimism about a potential Venus game-changer sure to lend support.

The news raises the prospect of two giant mining listings this year, after Rio Tinto enlisted an all-star team to advise on the possible float of its Pacific Aluminium business earlier this month.

Deal-hungry investment bankers will be watching closely.

News Limited, Ten Network

News Limited has poured cold water on a rumour it might make a tilt at Ten Network, based on close ties between the broadcaster's incoming chief executive Hamish McLennan and News' controlling Murdoch family.

"News Limited has no plans to acquire Channel Ten,” the company said in a statement to The Australian Financial Review. It labelled speculation to the contrary "highly fanciful” and "conspiratorial”.

Buyout talk is based on Ten's appointment of McLennan, who was previously executive vice-president in the office of chairman, Rupert Murdoch, at News Corporation, and who also chaired the News Limited-controlled REA Group. What's more, News Corp director Lachlan Murdoch is chairman of Ten with a 9 per cent stake of his own.

But what's important to consider here is that even if News were to launch a bid for Ten, the Australian Competition and Consumer Commission would probably block it.

When Kerry Stokes asked the ACCC about buying Consolidated Media Holdings and its 25 per cent stake in Foxtel, the watchdog raised concerns about Seven teaming up with the pay-TV provider to outbid other free-to-air channels for premium sporting rights.

News, an existing Foxtel investor, went on to buy ConsMedia, doubling its stake to 50 per cent. It's unclear why the ACCC would look at an effective Ten-Foxtel tie-up any differently to a Seven-Foxtel merger.

News Limited owns Business Spectator.

ASX

Deal watchers must be wondering if the ASX is searching for a new suitor, following a failed takeover by Singapore Exchange in 2011, as chief executive Elmer Funke Kupper talks up the chances of a future bid succeeding under new laws being proposed by regulators.

The federal government rejected SGX's $8.4 billion buyout two years ago on national security concerns – particularly, the loss of control over ASX's system for clearing and settling trades.

But now, the Council of Financial Regulators has put forward plans to strengthen regulation of the country's financial market infrastructure by keeping oversight in domestic hands, even if the exchange were operated by a foreign company.

"The regulatory problem has been fixed," Funke Kupper told Dow Jones Newswires. "If it were to happen again, the regulator would say we're now comfortable under Australian laws, irrespective of who owns it, that we can take control of it."

While he stressed there were no deals currently in the pipeline, he said there was still strong business logic behind the consolidation of international exchanges.

Any takers?

Wrapping up

Meanwhile, don't hold your breath for the anticipated $3 billion-plus float of EnergyAustralia. Its Hong Kong parent, CLP, just reported a big fall in full-year earnings from the former TRUenergy unit.

Releasing the results, CLP chief executive Andrew Brandler said no decision had been made on "the principle, timing or terms” of any EnergyAustralia listing, but his explanation about a previous delay, in 2011, was more telling.

"We decided not to proceed [with a float] as we believe that, with the operational imperatives and general economic environment described, the current earnings performance of the business falls short of the level which we believe the company can deliver on a longer term and sustainable basis,” he said in a statement.

It doesn't sound like much has changed.

And finally, Ramsay Health Care chief Chris Rex is on the hunt for acquisitions large and small as he chases long-term growth targets.

"Without an acquisition I’m confident that the growth of the company can occur,” Rex told The Australian Financial Review. "But to get that 20 per cent plus growth there is no doubt that a series of acquisitions or a large acquisition would need to occur.”

He names General Healthcare Group and Spire Healthcare, two of the largest private hospitals in the United Kingdom, among the companies Ramsay might pursue.

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