GPT Group has pulled up stumps – it won’t be doing a deal with Australand Property Group. Where to now for Australand and major shareholder CapitaLand? Sundance Resources had some better news yesterday and the share price responded. Meanwhile, KordaMentha is in some deals news in relation to Becton Property Group and Gunns Limited, and Peet makes preparations to assert itself over developer CIC Australia.
Australand Property Group, GPT Group
Australand Property Group shares are likely to take a spill this morning after its only declared suitor pulled out just minutes after the market closed.
GPT chief executive Michael Cameron appears to have made a sharp U-turn with the property group, declaring that it doesn’t need to purchase Australand’s commercial and industrial businesses. Less than a month ago Cameron said GPT "remained committed to submitting a deal".
“GPT has maintained a disciplined approach and has consistently advised the market that it does not need to proceed with the transaction to achieve its strategic goals,” said GPT in a statement to the market at 1606 AEST yesterday.
Just where that leaves Australand and its Singaporean majority shareholder CapitaLand standing is hard to tell. The Australian reports that sources believe the company is still a takeover target, however The Australian Financial Review understands that Blackstone Group has also pulled out of the process.
If there isn’t sufficient appetite for a stake sale and the bids aren’t large enough for a full sale, CapitaLand could sell down its stake.
Given that CapitaLand owns 58 per cent of Australand, it’s difficult to see the Singaporean investors making much of a dent in that stake swiftly.
Royal Dutch Shell is battling the same mentality with its stake in Woodside Petroleum. If the market expects you to offload a lot of shares, it’ll take away any chance of a premium.
There’s also the fact that property investors have filled $1 billion in raisings within the last month between Stockland Group, Cromwell Property Group and Mirvac Group.
A better day was had at Sundance Resources that ended with the stock up almost 24 per cent, admittedly off a very low base.
Sundance chairman George Jones told shareholders that interest in the company’s Mbalam iron ore project in West Africa remains, with “numerous groups” expressing interest to become involved in some capacity.
“These groups come from a range of countries and have widely diversified interests in areas such as resource projects, infrastructure provision and steelmaking,” said Jones.
“They have also expressed a range of views about how it would be possible to structure transactions which bring them into this project.
“These include the potential for some groups to provide port and rail solutions, through to direct investment in the project.”
As you can see, this is a far cry from the $1.3 billion deal from China’s Sichuan Hanlong Mining that Sundance spent almost two years dealing with before the takeover-that-never-was finally came to an end early last month.
Sundance’s market capitalisation is still dwindling at $303.6 million despite yesterday’s surge, but it’s heartening to see the company hasn’t been left bereft of options after the Hanlong debacle.
“It is well worthy of note that strategic investors continue to place significant value on West African iron ore projects,” said Jones, adding that Mbalam would enjoy some of the lowest costs in the global iron ore industry.
The same can’t be said for much of the projects under construction in this country.
Mariner Corporation, Becton Property Group
It looks like corporate raider Mariner Corporation has been given a serious talking to by the lending consortium of Becton Property Group over its board tilt.
According to a statement from Mariner, Goldman Sachs and Fortress Investment Group threatened to put Becton into administration if it continued to push for a shareholder meeting to get its chief Darren Olney-Fraser onto the Becton board.
“As this is not in the interests of Becton shareholders, or Mariner’s shareholders, Mariner has advised the Becton directors that, while it does not withdraw its 8 February 2013 requisition at this stage, it does not press the directors to call the meeting pending further advice from Mariner,” said the company.
Becton was put into receivership with KordaMentha two weeks after Mariner started pushing for Olner-Fraser to be elevated to the Becton board, where his chairman Don Christie already enjoys a seat.
But Goldman and Fortress are finally using the leverage they acquired over Mariner earlier this year.
Mariner might have 18 per cent of Becton, which is the subject of a recently extended loan, but Goldman and Fortress hold $246 million in debt facilities over Becton and preferred securities. These were picked up from Lloyd’s.
Gunns Limited, Macquarie Group, KordaMentha
Speaking of KordaMentha, the receiver will be unimpressed that a series of Gunns Limited growers' meetings will be held today to consider a Macquarie Group restructure proposal.
The Australian reports that KordaMentha sought an urgent injunction at the Victorian Supreme Court ahead of the meetings, which related to control of a portfolio of $500 million in nine Gunns managed investment schemes.
The last-minute effort did not persuade Judge Tony Pagone, however it was said that if Macquarie can secure majority support it will have to go before the courts to convince them the deal is “clean”.
Ten Network boss Hamish McLennan reportedly says the broadcaster’s $500 million tilt to dethrone Nine Entertainment as Australia’s home of cricket is not financially reckless.
“Everything’s budgeted for,” said McLennan in an interview with The Australian Financial Review.
Some analysts have raised concerns that Ten has reached too far for the five-year cricket broadcast rights deal, with some reports coming out of Nine itself indicating the bid is high.
Elsewhere, Peet says it’s getting close to making appointments to the CIC Australia board after securing an 84.17 per cent stake in the residential developer.
And finally, Equity Trustees has extended its merger for fellow financial services player The Trust Company to the end of July, urging shareholders not to accept a rival proposal from giant Perpetual.
The Australian Competition and Consumer Commission is investigating the Perpetual deal.