BREAKFAST DEALS: Fairfax fisticuffs

Gina Rinehart continues her bid to gain influence at Fairfax, while Qantas plays down rumours it may be subject to a takeover bid.

It seems that there's no stopping Gina Rinehart.

The persistent boss of Hancock Prospecting is still wrangling for influence at Fairfax, selling down her stake in the company to fulfil a technical clause in its insurance policy, despite continuing resistance from the publisher's old guard. The strategic move appears to have taken her a step closer to Fairfax's boardroom, with the help of a powerful new friend on the register.

Meanwhile, Ten Network and oO!hmedia edge closer to a deal, Calibre prepares to awaken Australia's sleepy IPO market and Qantas shoots down takeover rumours while inking a smaller deal of its own.

Hancock Prospecting, Perpetual Investments, Fairfax Media, APN News and Media

On the surface, Gina Rinehart's latest move in her drawn-out battle for seats on Fairfax's board seems counterintuitive. The mining crusader revealed that she had offloaded a 3.7 per cent stake in the publisher – at roughly a $3 million loss – to bring her holding just below a 15 per cent threshold above which the company's insurance policy doesn't cover board members.

But, according to The Australian, Rinehart found a friendly buyer. Perpetual is believed to have picked up most the 86.5 million shares sold, in a deal crossed by Bell Potter Securities, and the fund manager has already indicated that it supports Rinehart's push for representation.

On the other side, Fairfax chief executive Greg Hywood is understood to be in talks with Brett Chenoweth, his counterpart at APN News and Media, possibly in regards to a publishing tie-up, according to The Australian Financial Review. The paper says the companies may consider merging their regional newspapers in a true joint-venture, or embark on a smaller-scale printing partnership.

Given Fairfax's renewed focus on cost-cutting, and perhaps also its need to strengthen itself against moves by Rinehart, the savings on offer may prove attractive.

Ten Network, oOh!media, Eye Corp

Ten Network, another of Rinehart's interests, is also in the spotlight this morning, amid talk that the media company is close to agreeing on a price for its Eye Corp business with long-time suitor, oOh!media.

According to The Australian Financial Review, Ten had wanted $130 million for its outdoor advertising arm, but it may now be willing to go lower as it scrambles to secure funding to support a debt facility that falls de next March and also programming investments.

Qantas, Gate Gourmet

Qantas chief executive Alan Joyce has poured cold water on reports that investment banker Mark Carnegie and others may be planning a syndicate bid for the airline. Joyce said he had not received such an approach, formally or informally, although it's worth noting that the potential bidders were only said to have sounded out banks.

The Flying Kangaroo may yet receive a knock at the door.

In the background, Qantas has finally sold its international catering business, Gate Gourmet, which supplies meals to other airlines, according to The Australian Financial Review. It's unclear how much the asset sold for, although the newspaper notes that former chief Geoff Dixon had attempted to sell the carrier's entire catering division in 2005 for up to $400 million (the plan was abandoned because he couldn't find a buyer).


Perth-based engineering firm Calibre is preparing to test Australia's tepid IPO waters – and deal watchers are paying close attention.

According to The Australian Financial Review, joint lead managers Goldman Sachs and UBS are this week searching for institutional investors willing to pay $75 million for a 15.7 per cent slice of Calibre, ahead of an August 6 listing that would value the company at $477.9 million.

The newspaper says Calibre plans to sell new shares at $1.63 each, which represents an earnings multiple of 8 times based on 2013 profit protections. As part of the share sale the company's largest shareholder, private equity group First Reserve, will have its stake diluted from about 70 per cent to 60.9 per cent.

Bankers will be praying that Calibre unblocks an IPO pipeline that already contains Coates Hire, BIS Industries and McAleese Transport, although it's far too soon to tell which way the deal will go.

Reportedly, the capital raising has already been re-priced to make it more attractive, and investors will have bitter memories of Barminco, another mining services company, which was forced to cancel its float a year ago for lack of investor enthusiasm.

Wrap up

Brian Wilson, the new chairman of Australia's Foreign Investment Review Board will join Treasurer Wayne Swan in Beijing next week, where the regulator will brief lawyers, bankers and other advisors on Australian government policy regarding Chinese investment. The former investment banker will travel as part of a delegation of 30 officials, but plans to hold some forums of his own to address the contentious topic.

PMP, meanwhile, appears to have learned from David Jones' embarrassing takeover affair this week.

The printer and publisher has blocked TMA from its data room, citing concerns its suitor wouldn't be able to raise the cash to support its $250 million takeover offer. TMA, which offered to pay between 68 cents and 78 cents a share for PMP – compared to its closing price of 33 cents yesterday – won't be allowed to continue due diligence until it presents proof of funding, according to a statement from the target.

Lend Lease has already begun advertising for jobs linked to the construction of the $2 billion Sunshine Coast University Hospital, in the surest sign yet that the company is set to win a contract to deliver the project in partnership with the Queensland government, according to The Australian Financial Review.

The builder heads a consortium including Capella Capital, Spotless and Siemens, which is believed to have beaten a second group consisting of Macquarie Capital, UGL and Bilfinger Berger.

Finally, ANZ Banking Group plans to continue its expansion into Asia, despite its decision not to participate in a capital raising by Bank of Tianjin, in which it owns a 20 per cent stake.

The local bank, whose interest in Tianjin will be diluted to 17.6 per cent, says it would prefer to focus on its ANZ China operations instead. It paid $400 million to set up ANZ China in 2010, and pumped an additional $300 million into the unit two months ago.

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