BREAKFAST DEALS: CLP on hold

CLP Holdings dampens hopes of an ASX listing this year, while Perpetual reaches out to the ACCC on Trust Company.

Hong Kong’s CLP Holdings has all but killed off hopes that it might list on the ASX in 2013. Perpetual has referred its bid for Trust Co to the ACCC; let’s see if rival suitor Equity Trustees can find an objection. Meanwhile, Goodman Fielder and Elders lit up the market yesterday, GPT Group has picked up some cash that could still end up in an Australand deal and Macqaurie’s hybrids have proved a hit.

CLP Holdings, EnergyAustralia

It’s becoming increasingly clear that Hong Kong’s CLP Holdings will not list its Australian business on the ASX this year, leaving the depressed local IPO industry to rely on other players for a spark.

CLP issued its first-quarter report yesterday and it smelled of a company that has no intention of testing the value of its Australian business, power retailer EnergyAustralia, in the open market.

The energy investor said market conditions in Australia “remain difficult,” adding that pressure on wholesale prices, energy demand, regulatory uncertainty and competition were continuing to make things difficult for EnergyAustralia’s financial performance.

At the beginning of the year, many industry onlookers were hoping that big players that had considered listing in 2012, namely CLP and Genworth Financial, would come back in 2013. As central bank money printing pushed equities even higher, these hopes only felt more reasonable.

But Genworth chief executive Thomas McInerney said earlier this month that he’d like to see some more evidence from the Australian IPO market before the decision to list 40 per cent of the Australian business would be seriously considered.

The news from CLP reinforces the fact that the local IPO industry is probably only destined for some tentative steps towards recovery in 2012. If we hear news directly from the US Federal Reserve chairman Ben Bernanke on Wednesday that the Fed is looking at ways to eventually exit QE3, expect a pullback in equities and even less appetite to list.

As such, Australia’s IPO market is focussed on next month’s opening-day performance of fertility treatment company Virtus Health, which raised just under $450 million late last week.

Health insurance comparison site iSelect is the next one of interest for the market. Best of luck to them.

It would be rude to belittle the efforts of Virtus Health and iSelect. It’s a big milestone for both companies and they deserve all the best wishes.

But as an industry, the IPO investment bankers and lawyers like big floats… huge floats.

A billion dollar float is what they want and they’re not going to get it.

Trust Company, Perpetual, Equity Trustees

The competition watchdog is taking a look at Perpetual’s $220 million offer for Trust Company after a voluntary submission from the wealth mammoth.

Perpetual reached out to the Australian Competition and Consumer Commission after it put a rival proposal to the offer from Equity Trustees, which is closer to a merger of equals. Perpetual is taking Trust Co over.

Interested parties are being asked to drop the ACCC a line if they’ve got any concerns. That means competitors and related industries that could be hurt by consolidation.

A decision is due by July 11.

Goodman Fielder, Elders

Two companies grabbed the attention from deals watchers during yesterday’s session – Goodman Fielder and Elders.

Starting with the breadmaker, a 5 per cent stake in Goodman was traded by Deutsche Bank yesterday morning, according to The Australian.

Attention naturally falls to Singapore’s Wilmar International, which is thought to have wanted off the register for some time after its 10.1 per cent stake purchase led to a great deal of nothing.

Goodman and Wilmar got into a still-to-be-resolved argument in August last year about whether the latter put a takeover offer to the former. Wilmar believes yes and Goodman believes no.

Perhaps Goodman, which bought in at 60 cents, has managed to sell out at long last. The stock closed at 73 cents yesterday.

Meanwhile, Elders shares shot out of sight, surging 49.4 per cent to 11.5 cents amid speculation that the company’s long asset sales process has finally reached a conclusion of sorts.

The Australian Financial Review anticipates that the company will inform the ASX today that it hasn’t the faintest idea why its share price jumped so much. However, the newspaper understands that a deal could be struck by the end of the week.

GPT Group

As anticipated, GPT Group has offloaded its half stake in Erina Fair to South Korea’s National Pension Scheme for $397 million, a 1 per cent premium.

GPT boss Michael Cameron said the company intends to use the proceeds to expand its office and industrial/business park portfolio.

However, everyone’s eyes are on Australand and whether GPT can get a deal down for its non-residential assets.

Lend Lease’s unlisted Australian Prime Property Fund Retail owns the remaining 50 per cent of Erina Fair.

Macquarie Group hybrids

In textbook fashion, investment bank Macquarie Group has announced a large increase in the size of its hybrid issue after a strong showing from investors.

Macquarie was seeking to raise about $400 million, but received commitments of $580 million and has subsequently increased the maximum offer size to $600 million.

Even with the benchmark index up 18.8 per cent over the last six months, investors are still keen to secure the reliable returns that hybrids offer.

The Macquarie notes will pay a distribution twice a year at a rate 4 per cent above the bank bill swap rate.

Australian government bonds

As of this morning, Australian investors will easily be able to mix it with the big institutions with the introduction of ASX trading in Australian government bonds.

Today, investors will be about to buy and sell units equivalent to Treasury bonds with a $100 face value.

The high popularity of Australian government bonds for international investors has been a topic of great interest in business media, particularly with interest rate so low and the Australian dollar so high.

Wrapping up

Apex Minerals has pulled its planned $50 million sale of the Wiluna gold mine to Ever Prosperity Investment.

After agreeing to a 60-day due diligence period last week in exchange for a payment of $250,000 by Monday, Apex was left wanting yesterday and cancelled the deal.

Qantas Airways has agreed to issue another $125 million in fixed rate notes that will mature in April 2020. The notes are priced at 280 basis points above the asset swap rate.

And finally, sticking in a way with the skies, SkyCity Entertainment Group has picked up the Queenstown Wharf Casino from Malaysia’s Lasseters for $5 million.

We admit, that segue way was a big stretch.

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