BREAKFAST DEALS: Chi-X clearance

ASIC paves the way for Chi-X to set up shop in Australia and the move should bolster the case for the $8.4 billion ASX-SGX merger, while Telstra reveals its NBN contingency plan. Meanwhile, James Packer is reportedly ruing his decision to bring mate Lachlan Murdoch into Ten Network's board, but despite their purported bust-up stealing the headlines, Packer's move could be more about strategy than emotion. Meanwhile, Rupert Murdoch's News Corp gets ready to spin out Sky News into a new company – but is it going to be enough to placate the critics of its $12 billion move on BSkyB? Elsewhere, Alinta Energy shareholders start getting second thoughts about the $2 billion debt restructure, Downer gets support from institutions and Quickstep Holdings eyes a helicopter contract.

ASX, Chi-X, ASIC

The Australian Securities and Investments Commission (ASIC) has paved the way for Chi-X to set up shop as an alternative stock exchange later this year, with the corporate regulator confirming that the new integrity rules for the sharemarket are due out on April. While ASIC's green light comes after a lengthy wait for Chi-X we all knew that it was going to make an appearance sooner or later. With a timetable now firmly set interest will now turn on just how the news affects the Singapore Exchange's (SGX) $8.4 billion bid for ASX Ltd. The local bourse operator didn't waste any time in making the point that ASIC's move reinforced its case for the merger with SGX. However, that didn't stop the ASX from saying that ASIC had dropped the ball when it comes to regulating trading done in dark pools, which allows institutions to make trades without revealing price and volume. The ASX reckons that more work is needed to address the issue, and while Chi-X may be happy to stay out of these pools when it makes its debut in Australia, the ASX is worried that other entrants may not be so accommodating. Dark pools do offer investors a cheaper alternative for buying and selling shares so the ASX's position here is understandable – but using it to further delay Chi-X's entry seems unnecessary, especially when analysts believe that it might be the one factor that could help the ASX and the SGX to press their merger case to Canberra.

Telstra's NBN plan B

Telstra CFO John Stanhope's charm offensive to put the minds of the telco's retail shareholders at ease has kicked off, with Stanhope revealing Telstra's contingency plan just in case the National Broadband Network (NBN) deal goes sour. Stanhope has reportedly told shareholders that Telstra's decision to lease rather than sell its assets to the Labor government was designed to ensure that it could re-utilise those assets just in case the NBN was binned by a new government in Canberra. He also said that the telco would use a mix of copper and fibre network to provide high speed broadband to its customers. The comments came as the ACCC released its ruling on what Telstra can charge its rivals for access to its fixed line network. The competition watchdog has reduced the monthly wholesale line rent by $5, from $25.57 for homes and $26.93 for businesses to a flat national fee of $22.10. The telco will continue to charge $16 a month in wholesale prices in metropolitan areas. The new pricing regime should cut its fixed-line revenue by millions of dollars but it will take some time to work out what impact it may have on Telstra's $11 billion NBN deal with the government.

James Packer, Lachlan Murdoch, Ten Network

Media scions James Packer and Lachlan Murdoch's purported bust-up continues to generate more speculation with talk now that some of Ten Network's directors may follow Packer's lead and leave the company. According to The Australian Financial Review, Packer's abrupt departure has left many Ten directors scratching their heads and some may choose to follow him out and resign from the board. It is highly unlikely that such a scenario will eventuate. Packer may not think that former Seven man James Warburton is the right man to run Ten, and he may even be genuinely concerned about ticking off Seven supremo Kerry Stokes, but the idea that the mogul is willing to jeopardise the plans he himself set in motion with a $260 million share raid last October seem a touch implausible. However, that hasn't stopped the rumours from coming in thick and fast, with The Australian saying that Packer is now having second thoughts about inviting Murdoch into Ten's board and that he may sell his nine per cent stake in Ten to mining magnate and fellow board member Gina Rinehart. There is every chance that Packer's move has more to do with strategy and less with emotion. With Murdoch reportedly playing a more hands on role with the running of the network, Packer really doesn't need to stay on Ten's board. And some analysts have pointed out that Packer's move is more likely to have been spurred by a desire to get away from the spotlight, especially if Ten decides to shut its One HD sports channel. Packer's Consolidated Media owns a 25 per cent stake in Foxtel and holds a 50 per cent interest in Premier Media Group, which owns Fox Sports.

Rupert Murdoch, News Corporation, BSkyB

Meanwhile, Rupert Murdoch's News Corporation (News Corp) has won the UK government's approval to push through its $12 billion takeover of satellite broadcaster BSkyB, with the media giant willing to spin off Sky News as an independent UK public limited company. News Corp confirmed earlier reports that it will keep a 39 per cent stake in the new company and will provide the company with a 10-year long-term contract to effectively provide a long-term revenue stream. The company will have its own board, with mainly independent non-executive directors and more importantly, an independent chairman. However, there is already talk that the deal is facing a legal challenge, with Sky News saying that an alliance of five newspapers and BT have rejected News Corp's concessions as window dressing and maintained that a News Corp-BSkyB tie-up will be a bitter blow for the UK media sector.

Wrapping up

With the shareholder vote to approve the $2 billion debt for equity rescue plan for Alinta Energy edging closer, it looks like the seven lenders behind the plan are facing stiffer opposition. Earlier this week, US-based shareholder Coastal Capital voiced its displeasure at the prospect of getting 10 cents a pop for its 16.5 per cent stake, saying that Alinta could possibly trade for another year before having to restructure its $2.8 billion debt and continue to generate better returns than the 10 cents on offer. Coastal has now reportedly been joined by fund manager and shareholder Bronte Capital, which contends that 10 cents a share is not adequate and has asked for more details on the rescue plan spearheaded by TPG and its partners Oaktree Capital and Anchorage Capital. The lenders' threat of putting Alinta into administration, thereby leaving shareholders with nothing, lies at the heart of this issue. TPG and its mates are counting shareholders to take the 10 cents on the table rather than risk losing it all, however, that may not be case anymore. Despite the rising doubts, the thing in the lender's favour is that Alinta's largest shareholder GPG is the one that helped negotiate the deal. Either way, things could get interesting next week if Coastal and Bronte Capital start finding some support on the eve of the meeting. Elsewhere, Downer EDI has completed the institutional component of a capital raising through a combination of a 97 per cent subscribed entitlement offer and a bookbuild. Downer has raised $200 million from the one-for-four institutional capital raising at $3.25 per share. The retail component of the capital raising opens on March 8. Meanwhile, Aussie aerospace players have received a boost as the Avalon Airshow continues to thunder along. First off the runway is South Australian outfit, Levett Engineering, which has picked up a $US50 million defence contract to provide titanium brackets and mounts for the F135 engine used in the F-35 Joint Strike Fighter. Meanwhile,  Quickstep Holdings is back in the news, with the aeronautical firm signing a memorandum of understanding (MOU) with global helicopter company Sikorsky International Operations, to become a potential supplier to the global giant. However, there is a catch, with the agreement contingent on Sikorsky winning a contract from the Australian Department of Defence. Sikorsky is one of the two suppliers tendered for the department's Air 9000 Phase 8 program. Elsewhere, KPMG chief executive Jan Dawson is set to join the board of Air New Zealand on April 1.