BREAKFAST DEALS: Burrup bout

The competition watchdog puts the shackles on Wesfarmers bid for Burrup fertilisers, Westpac's chairman-elect Lindsay Maxsted backs CEO Gail Kelly to stick around for a good while and there is talk that his appointment may see the bank hit the acquisition trail. Meanwhile, Centrebet finally finds a suitor but it's still early days in the race for the bookmaker, and James Packer cuts the final ties to the Packer family's long-held relationship with the Australian beef industry. Elsewhere, Virgin Blue eyes a Chinese alliance, BHP Billiton flags its potash priorities and the retail portion of Leighton Holdings' recent capital raising misses the mark by a long way.  

Wesfarmers, ACCC, Burrup Fertilisers

With the race for Burrup Fertilisers now formally underway the Australian Competition and Consumer Commission has moved to put a spanner in the works for diversified conglomerate Wesfarmers and its plans to nab a 65 per cent stake in the ammonia producer. The regulator has invited submissions on the Wesfarmers bid and while the conglomerate is yet to officially respond to the decision it will no doubt be rankled by the fact that not only have its plans been somewhat shackled ACCC, but rival bidder Orica has been given the greenlight by the regulator. The watchdog's key concern is that Wesfarmers could use the Burrup purchase to turn the screws on its rivals in the explosive market by beefing up its presence in the ammonium nitrate market. Wesfarmers already has the Kwinana facility in Western Australia and is the only manufacturer in the mining state. So Orica, which also produces ammonium nitrate, will be happy with its good fortune and so will another contender, Yara, which already holds a 35 percent stake in Burrup's existing ammonia plant and is hoping to get another $500 million project up and running in the state through its joint venture with Burrup. The ACCC reckons Wesfarmers will kybosh those plans if it gets control of Burrup, hence the expanded scrutiny. Interestingly, the third Burrup bidder with an ammonium nitrate production capacity is Incitec Pivot, which should hear from the ACCC by June 9.

Westpac Banking Group

Westpac Banking Group has a new chairman, with current audit committee chairman Lindsay Maxsted anointed to succeed Ted Evans, who was instrumental in the St George merger and in putting Gail Kelly behind the wheel at the bank. Maxsted's appointment has surprised some in the market but the focus is now turning on whether Maxsted will look to shake things up or maintain the status quo. Maxsted has reportedly already put one critical issue to bed, saying that CEO Kelly wasn't going anywhere. Kelly's continued future at Westpac had been subject to some speculation last December and there were some suggestions that the departure of Evans may prove to be trigger. Maxsted was quick to shoot down that idea yesterday and extolled Kelly's virtues so her presence seems firmly secure. However, the Australian Financial Review suggests that Maxsted's entry may herald a return of Westpac to the M&A table. One obvious area for acquisitions will be the wealth management sector and the paper said that the bank couldn't have a better numbers man in Maxsted, who has a formidable reputation when it comes to dealmaking. In other banking news, HSBC looks set to shake up its foundation with new chief Stuart Gulliver reportedly ready to put most of the bank's US operations on the block. According to UK's Daily Mail, Gulliver has ordered a 'strategic review' of the group's American credit card division and branch network. The sale of the two businesses could raise more than £12 billion for Britain's biggest lender.  

Centrebet, Sportingbet

The Australian corporate bookmaker industry looks ready to welcome another player from far away shores, with Con Katafaris' Centrebet finally in some concrete talks about a potential takeover. M&A chatter at Centrebet had been going on since late 2009 but finally the bookmaker has found a suitor in UK's Sportingbet, which has evidently got the jump on rivals Ladbrokes and William Hill. Sportingbet has offered to buy all of Centrebet's outstanding ordinary shares and performance rights at, or around, $2.00 each, valuing the target at $183 million. That's a little better than the $133 million takeover of Sportsbet by Ireland's Paddy Power last December. Sportingbet may have a headstart here but it still needs to raise the money to fund the deal so this race is still far from finished.  

Cargill, Kerry Packer, Teys Bros

It's in with the new and out with the old for James Packer, who has reportedly developed interest in online retailers but has closed the book on the Packer family's long held ties with the Australian beef industry. Packer, who had already sold his Consolidated Pastoral beef business in 2009, has now offloaded his 50 per cent stake in meat processor Teys Bros. Packer has has sold the stake to global agribusiness giant Cargill for a reported price tag of just under $500 million. The deal is subject to necessary regulatory approval. Cargill and Teys have agreed to form a joint venture "Teys Australia- A Cargill Joint venture” which will include the assets of both companies' existing beef processing and cattle feeding businesses. Cargill is certainly not making any bones about becoming a dominant player in the Australian agribusiness scene and also finalised its purchase of AWB's commodity management arm from Agrium.

Virgin Blue, Delta Airlines, China Southern

Virgin Blue has managed to placate US regulators in order to get another piece of its international alliance strategy off the ground, with the US Department of Transportation proposing to grant antitrust immunity to Virgin's joint venture with Delta Air Lines on the trans pacific route. After deals with Air New Zealand and Etihad Airways Virgin hit a roadblock in the US, but the eight months of lobbying has finally paid off for the airline. Virgin Blue boss John Borghetti has made no secret of the fact that a failure in the US could have been a hammer blow to its growth strategy so there will be relief for him on that account. That leaves the final piece of the puzzle, Asia, and the Australian Financial Review reports that Virgin Blue now has its sights set on an alliance or two in Asia, and is already in close talks with China's largest airline, China Southern.    

Resources wrap (BHP Billiton, BC Iron, Lynas)

We start with BHP Billiton, with the mining giant's boss Marius Kloppers telling the Merrill Lynch mining conference in Barcelona that getting the Jansen potash project up to scratch was a key priority. BHP is now expected to approve spending for the project in the next calendar year. The fact that Jansen is now a key project was made abundantly clear earlier this week when the miner relocated its diamond and specialty unit to Saskatoon, Saskatchewan in a bid to mend tensions with the provinces' premier, Brad Wall, who was instrumental in scuttling BHP's bid for Potash Corp. Evidently the move has worked, with Wall telling Canada's Globe and Mail newspaper that this was a very good move by BHP. Back to the speech in Barcelona, Kloppers has played down talk of any major acquisitions in the short term and warned that there might be a few speed-bumps ahead for commodity prices. Elsewhere, the miner has agreed to take over operations and take a participating interest of up to 60 per cent in an oil prospect off the southwestern Philippine island of Palawan. Meanwhile, a couple of mining deals bit the dust yesterday with the BC Iron-Regent Pacific deal now dead and Lynas scrapping its deal with Forge Resources. The BC Iron deal was on shaky ground anyway given the behaviour of the suitor, and BC boss Mike Young has made the right call in heeding the advice of the independent expert and binning the transaction. Meanwhile, Lynas shareholders can breathe a sigh of relief and chalk one up for the win column after forcing the rare earth miner to back down on the proposed deal to offload its Crown and Swan deposit to Forge. The related party transaction had sparked a revolt among shareholders with some even threatening to lob a rival bid of their own for the assets. Lynas subsequently postponed the sale to address their concerns and has now wisely decided to concentrate on its core business.
 
Wrapping up

It looks like the retail portion of Leighton Holdings' capital raising has fallen well short of the mark, with less than half of the retail investor shares available from Leighton reportedly sold. According to the AFR, Leighton stock has been bought by only 44 per cent of eligible retail investors, who in total purchased some 4.7 million shares worth $106 million, or $22.50 per share. The remaining 6.1 million shares are now expected to be sold, at less than $22.50, to institutions today by Leighton's underwriter, UBS. Meanwhile, It looks like Japan's Asahi Breweries and its Australian bottler Schweppes haven't given up hope of nabbing P&N Beverages, with Asahi's president Naoki Izumiya telling the Japanese media that Schweppes was still in talks to buy P&N despite the ACCC's initial rejection. Elsewhere, Fairfax papers report that the listed arm of DFO founders' David Wieland and David Goldberger's business, Verticon, has called in administrators day after the departure of director Noel Henderson from the board. Verticon has reportedly brought in McGrathNicol as administrators after collapsing under the weight of a $44 million Westpac loan.