BREAKFAST DEALS: Booking CBH

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CBH responded to a speeding ticket yesterday saying it was in incomplete discussions 'in respect of transactions' – rumoured to be with Nyrstar or Perilya.

CBH Resources, Perilya, Nyrstar

All eyes will be on zinc and lead producer CBH Resources this morning, which is expected to release details of a takeover proposal it has received. While it was thought a deal with rival Perilya would be on the cards, other talk suggests one of the world's largest zinc metal producers, Nyrstar, could be behind an full takeover plan. Nyrstar, formed in 2007 from a merger between Umicore and Zinifex, and has wholly-owned operations in Hobart and Port Pirie as well as some joint ventures. After its share price surged 26 per cent yesterday against a drop of 0.4 on the benchmark index, CBH responded to a speeding ticket saying it was in incomplete discussions "in respect of transactions”. Patersons resources analyst Alex Passmore told AAP a likely announcement would be a plan with Perilya to jointly process ore from deposits in Broken Hill – which has been discussed in the past. The AFR reports that Japan's Toho Zinc, which owns 23 per cent of CBH and has offtake agreements, would have to approve any takeover. Perilya added to its coffers in December raising more than $55 million in a discounted share offer, with its largest shareholder Shenzhen Zhongjin Lingnam Nonfemet taking up nearly 10 per cent of the placement. It now has a market capitalisation of around $365 million, with CBH sitting on about $158 million.

Ivanhoe Australia, Ivanhoe Mines

There is speculation that Canada's Ivanhoe Mines may offload its 83 per cent stake in listed local miner Ivanhoe Australia. The report comes as Ivanhoe Mines said it had hired global investment-banking firm Citigroup and London-based mining-industry adviser Hatch Corporate Finance, to help it evaluate options to enhance shareholder value, Bloomberg reports. There are a number of options on the table, but The AFR says the sale of the $1 billion stake in Australia could provide it with much needed capital, especially as it faces around $US2 billion in costs to develop Mongolian copper and gold mine Oyu Tolgoi. The Australian goes as far to say a source close to Ivanhoe Mines had not ruled out a sale of the whole company (which has a market capitalisation of just over $US6.8 billion), but also reports founder of Ivanhoe and chairman of the North Queensland based company, Robert Friedland, may be looking to sell his personal $200 million stake in Ivanhoe Australia. Chief executive of the local operation, Peter Reeve, said that while a sale by Friedland could not be ruled out, he wasn't fazed by it, adding that the team at Ivanhoe was having a great time "doing what we're doing" and it wouldn't matter if it is with another company. Ivanhoe was one of the best performing small-to-medium-cap resources stocks last year, according to Intersuisse. Ivanhoe Mines said it could find the extra funds from the spin-off of assets by one or more strategic shareholders – including Rio Tinto, which has a 20 per cent stake (and therefore an indirect 16 per cent stake in Ivanhoe Australia). However, Dow Jones reports Rio has said it would be relatively easy to raise the money, and has talks with groups including International Finance Corp and the European Bank for Reconstruction and Development regarding financing. It could also sell its 80 per cent stake in coal miner SouthGobi Energy, which is currently planning a $US400 million IPO in Hong Kong. The AFR reports the most obvious buyer for Ivanhoe Australia would be Xstrata, but The Australian says it is not considered a likely bidder. Reuters notes that if Friedland decides to sell Ivanhoe Mines it would fit with his past behaviour – in the past he sold an undeveloped nickel-copper deposit in Canada to Inco for $US3.7 billion, which was subsequently purchased by Vale.

Rio Tinto

While on Rio Tinto, Reuters is reporting that $US300 billion sovereign wealth fund China Investment Corp (CIC) is eyeing a bid for state-owned Chinalco's stake in the mining giant. DJ Carmichael analyst James Wilson told Reuters the move could be positive for Rio, saying "you want a cornerstone investor who sort of sits there" – though that is what Chinalco was doing before Rio went to it in mid-2009 it seeking help to ease its debt and then rejected an offer of $US19.5 billion to help, instead favouring a highly dilutive $US15 billion stock sale. While Chinalco likes to influence operations, Reuters says CIC is a pure investment vehicle. Sources told Reuters Deutsche Bank is likely to advise CIC in any deal involving Chinalco, after several investment banks approached the fund late last year on a possible deal. Relations between Chinalco and Rio have soured after it rejected the tie-up, with Beijing subsequently arresting four Rio employees, including Australia citizen Stern Hu, accusing them of stealing state secrets and of bribery. Yesterday, a spokesman for the Department of Foreign Affairs and Trade said the investigation is scheduled to conclude on January 11 – though it could be extended.

Woolworths, Independent Liquor

Even if they were considering making a move on Independent Liquor, supermarket operator Woolworths has been beaten to any potential announcement – with the beverage giant saying it has no intention of giving up ownership. The Australian reports private equity owners of Independent, Pacific Equity Partners (PEP) and Unitas Capital, want to maintain ownership as they continue to improve operations. Chief executive Peter Murphy also added he thought there would be significant competition issues if Woolworths had tried to buy the company. Fairfax reports Independent is currently worth far less than what the current owners bought it for. Woolworths said the company would not comment on market speculation.

Rocklands Richfield, Jindal Steel, Meijin Energy Group

In a baffling move yesterday, India's Jindal Steel reduced its stake in takeover target Rocklands Richfield by 2.1 million shares, causing the coke producer's shares to plummet nearly 16 per cent – this, a week after the Indian company made "another" bid for control of the company, matching a rival bid for China's Meijin Energy Group. The battle for Rocklands is beginning to look protracted, with bids now sitting at 56 cents a share from each suitor, after Jindal launched the first takeover offer at 42 cents a share. Jindal actually reduced its stake from 16.37 per cent to 13.6 per cent – an unexpected move when they need as much voting power as they can get – but The Australian reports Jindal said it was trying to come under the government's preferred level of foreign ownership resources.

Wrapping up

Macquaire Group, JP Morgan and Deutsche Bank AG have submitted bids for the Royal Bank of Scotland Group's stake in RBS Sempra Commodities, its joint venture with US utility and natural gas company Sempra Energy.The bids value the energy and metals traders at around $US4 billion, Bloomberg reports. This follows Macquarie's move last month to buy the North American power-trading portfolio of Integrys Energy Group. Australian iron ore producer Atlas Iron says it expects to sell a 70 per cent stake in its $3 billion Ridley project and had already lined up buyers from around the world. Bloomberg reports the sale should be completed by the end of the first half, with Atlas being advised by Goldman Sachs JBWere. Chief David Flanagan said it was in the final stakes of a deal. To Gunns, and it has been partially knocked back by Swedish bank Nordea, who said it won't fund its pulp mill in its current form. Gunns is being pushed for tougher environmental safeguards at its mill in the Tamar Valley, though two days ago it did announce the mill would use 100 per cent plantation timber. Forest products group Sodra, also from Sweden, is considered to be the front-runner of a number of parties involved in talks with Gunns, but there has been no official word from them yet either. To M&A, and Australia-based international law firm Freehills agreed with other players' announcements in the past week that Australia is set for a surge in M&A activity in 2010, with foreign investors likely to look at high-quality resources, financial services and property assets, AAP reports. At Griffin Coal, The AFR reports the collapsed miner will compile a list of advisors for a sale, with Indian and Chinese energy companies looking on. US-based energy giant Chevron announced a deal with Japan's Nippon Oil Corp yesterday, with Nippon to buy 300,000 tonnes of LNG from its Gorgon project in WA over the next 15 years. To aviation, and The Australian reports analysts have upgraded forecasts for Qantas after it announced its tie-up with AirAsia through budget offshoot Jetstar. One note on the airline said Qantas's domestic business in particular was a major earnings driver. Finally, Allco Finance's receivers have sold the failed financier's aircraft leasing business to China's HNA Group, after the deal was announced in May last year.

Madeleine Heffernan is on leave, returning January 11.