BREAKFAST DEALS: Billabong suspense

Billabong shares are likely to remain halted as Sycamore talks protract, while BHP Billiton's bond sale comes at an interesting time.

There's been a sale at Billabong International, but not the kind the company wants. As the surfwear maker's suitor pulls back, shareholders are running for the exits. Also this morning, BHP Billiton and Hoyts Group look to North America for funding, while Seven West Media Group and Telstra team up. Macquarie Group will also be looking for clues in a Gunns test vote.

Billabong International

Billabong International shares are expected to remain suspended this morning, after takeover talks with Sycamore Partners continued into the night, according to The Australian Financial Review.

The newspaper says a deal, probably at a price sharply lower than the 60 cents a share that had been offered, is unlikely to be signed by the opening bell on Thursday.

The prospect of yet another reduction in the value of Sycamore's bid, which started at $1.10, appears to be too much for some investors to stomach.

On Wednesday one of Billabong's largest shareholders, New York-based Teachers Insurance and Annuity Association, revealed it had sold down its 6.2 per cent stake to less than the 5 per cent required to be considered a substantial holder.

TIAA, which bought in last October at between 84 cents and $1.05, was dumping shares for as little as 46 cents.

There were suggestions yesterday that Billabong's banks have been running the show since the retailer appointed corporate advisory 333 Management, a division of insolvency specialist KordaMentha.

The wait continues.

BHP Billiton, Hoyts Group

BHP Billiton made its first splash in Canadian bond markets, raising $C750 million ($731 million) to apparently put towards debt refinancing. But what's most interesting about this deal is its timing.

While BHP Billiton has played down any link to operational decisions, it's hard to ignore that the bond sale comes as the mining giant considers whether to push on with its proposed $US10 billion ($9.7 billion) Jansen potash project in Canada. 

Others have suggested the Canadian sale is more about broadening the company's funding base. Its debts are already priced in currencies including Australian dollars, British pounds, euros and US dollars.

BHP Billiton isn't the only local company raising funds in North America. Hoyts Group, which is owned by Pacific Equity Partners, is tapping US lenders for $442 million, according to The Australian.

Proceeds from the capital raising, which includes two senior secured bank loans and a revolving credit facility, are expected to be put towards a refinancing deal and to allow Pacific Equity to obtain a dividend, the newspaper says.

Seven West Media Group, Telstra Corp

Seven West Media and Telstra Corp have teamed up to buy a $10.4 million stake in online health directory HealthEngine, which on the surface seems an odd target.

For its part, Telstra says HealthEngine, which helps connect users with doctors and dentists, will fit alongside its Sensis digital division and its new Telstra Health unit.

But the language used by Seven chief operating officer Rohan Lund is perhaps more revealing. He says of the deal, "We see a tremendous opportunity to partner with Telstra to build Australia’s biggest patient and practitioner marketplace. This is an exciting space and the combination with Telstra and Seven West Media presents a formidable alliance."

This talk of a "formidable alliance" is notable because of the rumours swirling before the deal was unveiled. Sources had suggested Seven was preparing to announce a content sharing deal with Telstra's BigPond, according to The Australian Financial Review.

The HealthEngine tie-up might just be the beginning.

Global Renewables

Investors looking for opportunities in Australia's popular infrastructure sector may soon get a shot at New South Wales waste services group Global Renewables.

The Wall Street Journal reports that the owners of Global Renewables, which claims to process 15 per cent of Sydney's household waste, have hired Fort Street Advisors to review the business – possibly for sale.

Global Renewables' Eastern Creek facility is said to churn through 220,000 tonnes of waste each year, earning the company $20 million in earnings before interest, tax, depreciation and amortisation.

Private equity firm Ironbridge Capital part owns the company alongside management. It's unclear at this stage how much the business could fetch.

Wrapping up

Sigma Pharmaceuticals' turnaround appears to be on track, with the company on the hunt for new acquisitions to hasten its growth.

Speaking after Sigma's annual general meeting yesterday, managing director Mark Hooper said the pharmaceuticals group was in a "strong position" to consider new opportunities, according to The Australian.

One might present itself in the ashes of the collapsed Harrison's group, for which Sigma was an unsecured creditor. It's currently in talks with the Harrison's receivers regarding the possible purchase of some of its 15 pharmacies.

And finally, Macquarie Group will be interested in the outcome of a Gunns investor vote today, which will determine a new responsible entity for two investment schemes managed by the collapsed timber company.

It should be a good test for similar upcoming votes pushed by Macquarie, which wants to take managerial control of nine additional Gunns schemes worth $500 million.

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