BREAKFAST DEALS: Extract fans

Uranium miner Extract Resources is expecting a takeover bid, while more big names eye Fairfax.

The global uranium industry is slowly, but surely, shaking off the stigma from the Fukushima nuclear power disaster and getting on with it. While the price of uranium is still in check, China is continuing to work towards securing supply and Australia’s Extract Resources looks certain to benefit. It’s expected that Extract will update the market sometime today about the takeover that’s assumed to be coming from China Guangdong Nuclear Power Corp, now that it has secured Extract’s 43 per cent shareholder Kalahari Minerals. Elsewhere, two other big names have reportedly given Fairfax Media the once-over. Meanwhile, Austar is lawyering up to get its meeting over the Foxtel takeover delayed, Royal Dutch Shell is now seriously targeting an exit from Woodside Petroleum and some PaperlinX shareholders have had it with the board, calling for an EGM.

Extract Resources, China Guangdong Nuclear Power Corp

Perth-based uranium miner Extract Resources can now set the timer for a bid from China Guangdong Nuclear Power Corp. Late last week, the Africa-focused company received news that Guangdong has secured a controlling stake – 89.5 per cent to be exact – in the UK’s Kalahari Minerals. It’s been a long time coming, almost a year after Guangdong first started talking to Kalahari and set takeover speculation about Extract in motion thanks to the British company’s 43 per cent stake in the ASX-listed company. March 1 is the deadline for Guangdong to deliver its downstream offer at a presumed cost of $2.2 billion. Rio Tinto looks to have been the catalyst, having agreed to sell its stake in Kalahari last week.

Gina Rinehart, Fairfax Media

Onlookers are waiting with bated breath to see what billionaire Gina Rinehart will do with her 13 per cent stake in Fairfax Media. But according to The Sydney Morning Herald, it could easily have been somebody else. The newspaper brings word from a handful of sources that say Fortescue Metals’ billionaire chairman Andrew Forrest and Seven Media tycoon Kerry Stokes have also taken a look at the media company. Then there’s the ever-entertaining Clive Palmer who said last week that he’s been somewhat inspired by Rinehart’s move and wouldn’t rule out doubling up.

Clive Palmer, ExxonMobil

Speaking of which, Clive Palmer is reportedly thinking about an offer from ExxonMobil for his Papua New Guinea tenements. The coal billionaire’s company Mineralogy has a subsidiary called Chinampa Exploration that has a number of offshore exploration licences at the top of the Gulf of Papua and Palmer says Exxon is interested in footing the bill for some exploration work in exchange for a stake in the company. Apparently the offer was put to Palmer in 2010 and the two sides held more discussions at the end of last year.

Austar United Communications, Foxtel

Austar United Communications shareholders would be forgiven for checking their calendars more often than usual. The regional pay-TV company is in the midst of a $1.9 billion marriage with Foxtel but the Australian Competition and Consumer Commission still hasn’t given its blessings. Austar shareholders were set to vote on the deal on February 17, but the company is seeking court approval to delay the meeting on account of the ACCC’s undoubtedly frustrating schedule. It should be said however that ACCC chairman Rod Sims made it clear late last year that the sheer number of documents the two companies delivered to encourage the consumer watchdog to approve the deal was always going to take a lot of time to wade through.

Woodside Petroleum, Royal Dutch Shell

Energy giant Royal Dutch Shell has confirmed what we’ve all known for a while now – Woodside Petroleum is not something that’s part of its long-term plans. Shell chief financial officer Simon Henry confirmed that the company is hoping to offload its entire $6.7 billion stake in the Australian oil and gas company, but will only do so "at the right price”. Shell set the stage for an exit 15 months ago by selling one third of its stake in Woodside, while adding that it would hold on to the rest of it for one year. Shell sold out above $42, so given that Woodside shares are currently trading at $34, the oil giant might have to exert some patience if it hopes to match that effort. Indeed part of the reason for weakness in the Woodside share price is investor anticipation of a Shell sell-down.

BHP Billiton, Rio Tinto

Mining giant BHP Billiton didn’t release to the market just how much it received by agreeing to sell its stake in Richards Bay Minerals, a South African mineral sands miner, to chief rival Rio Tinto. Now we’ve got an idea. According to The Australian Financial Review, UBS says Richards Bay was valued in 2008 at $US1.8 billion ($1.7 billion), which means BHP is set to get about $US800 million for its 37 per cent stake. Mineral sands prices haven’t exactly gone south since then and it’s expected that BHP will reap not just a better sum than $US800 million, but also a premium.

PaperlinX

PaperlinX chairman Harry Boon is refusing to step down after a group of shareholders told him to either resign or call an extraordinary general meeting. Shareholders have been frustrated to watch a $117 million takeover, said to be from private equity firm Platinum Equity, seemingly thwarted by the company’s hybrid holders. PaperlinX shareholders are understandably frustrated, having watched the value of their stock shrink by 85 per cent over the last 12 months.

Wrap up

In Western Australia, nickel producer Panoramic Resources has launched a $40 million takeover bid for Magma Metals, an explorer. Panorama already has nine per cent of Magma and is going for an off-market bid of two Panoramic shares for every 17 Magma shares, giving the target’s stock a value of just under 15 cents a pop.

In Queensland, Decmil Group has picked up a handy $90 million contract to build an accommodation village for BHP Mitsubishi Alliance. Its Australian subsidiary will start work on the facility in April.

And finally, US coal group Ouro is reportedly planning an ASX float that could value the business at $120 million. The Australian Financial Review reports that the company has sought out Bell Potter Securities to be lead manager of a pre-float placement of $15 million.