BREAKFAST DEALS: Foster's ammunition

Opportunistic suitors are employing a new set of tactics to win Australian companies at prices that might leave some shareholders feeling hard done by. Retail shareholders in Foster's are preparing to fight against what they believe is a bargain for SABMiller, brought about in no small way by a complicated proposal. Arguably, their case has been strengthened after a taxation rule on the Foster's capital return. Spotless Group is also under threat, with chairman Peter Smedley holding firm is against a barrage of criticism at the service company's annual general meeting for not engaging with private equity. Meanwhile, over at Centro, management has been forced into a last-minute sweetener after one shareholder capable of stopping the $3 billion restructure put its foot down. Elsewhere, the day when bankers could take control of Nine Entertainment has moved one step closer, New Hope might have to lower its expectations for its sales process and APN News & Media is reportedly looking to offload a big stake in its outdoor advertising business

Foster's Group, SABMiller

SABMiller has been forced to increase the cash component of its $12.1 billion bid for Foster's after the Australian Taxation Office wouldn't play ball. Under the original proposal, Foster's shareholders were to receive $5.10 in cash, a final dividend of 13.25 cents and a capital return of 30 cents per share. However that cash component will now rise to $5.40 after the ATO put a cork in the capital return idea. SABMiller was quick to point out that it doesn't change the enterprise value of the deal and the Australian brewer's shareholders won't be getting a cent more.

It's the latest twist in a deal that's received some quite vocal opposition from some Foster's shareholders that look set to lose the vote slated for December 1. Seventy-five per cent approval is needed for the deal to go through. The deal will give SABMiller, the London-based brewer of Peroni and Grolsch, almost a 50 per cent share of the Australian beer market.

Spotless Group

Forecasts of significant shareholder thunder turned out to be accurate at the Spotless Group annual general meeting. Chairman Peter Smedley vigorously defended the board's decision to refuse to engage with Private Equity Partners over a $698 million, or $2.63 per share, cash offer. It's the second time in six months Spotless has been sought by private equity.

It was a tough crowd for Smedley that included a 26 per cent block of shareholders who had signed pre-bid agreements with PEP, a former managing director in Brian Blythe questioning the company's performance since his departure and 8.9 per cent shareholder Orbis Investment Management trying unsuccessfully to change its vote of endorsement for two Spotless directors. Then there were the objections from striking cleaners to low wage levels and trying working conditions.

Smedley also played his cards close to his chest on the subject of prices Spotless would be willing to engage with. It's been widely reported that Smedley considers $3 to be a level at which discussion would be warranted, but at the meeting he reportedly said, "I've never mentioned a number”.

Centro

Centro Properties Group has been forced to sweeten the details of its proposed $3 billion restructure proposal after it became apparent that key shareholders were intending to vote the proposal down. Shareholders in Centro Retail Trust will now receive an extra $90 million in equity after Marathon Asset Management said it would not support the deal. The equity will come from the company's debt. Although it appears the process wasn't held hostage by just one shareholder alone, with The Australian reporting that York Capital, Orbis Funds Management and two other funds run by John Paulson were understood to be unhappy with the deal.

Nine Entertainment

CVC Asia Pacific sat down with lenders on Friday at UBS offices in Sydney asking for an "amend and extend” agreement on its financing for Nine Entertainment – apparently it didn't go well. According to The Australian Financial Review, banking sources indicate that some onlookers scoffed at the proposal and some could even contemplate selling their holdings of Nine Entertainment debt to hedge funds and investment banks.

The problem for Nine Entertainment boss David Gyngell, as pointed out with likely satisfaction by media billionaire Kerry Stokes, is that the company's $3.5 billion debt burden coupled with sluggish advertising conditions could force it into the hands of its banks unless it can come up with a refinancing deal. The only alternative to that prospect would be asset sales and, as Stokes would undoubtedly be aware, Nine Entertainment has some prime media assets.

New Hope

New Hope chairman Robert Millner will have a pretty good idea of what he can expect to get for the sale of the coal company, but he might have to check his ambitions. Indicative bids for the company are due today and it's been understandably reported that New Hope has received a lot of interest, but according to The Australian Financial Review less than half of the dozen or so bidders are likely to make the first round of bidding with the $5 billion price tag a bit steep for them. Attention is fixed on Yanzhou Coal and Aditya Birla Group, with a number of other Chinese and Indian players thought to be interested.

Grenda Transit, Venture Bus Lines

Melbourne's Grenda family has exited the world of buses, selling its 650 vehicle business to the Cornwall family's Venture Bus Lines. UBS ran a sales process and ultimately selected Ventura for the deal that will effectively double the size of the acquirer. While the price was not disclosed, the widely reported figure of $400 million has not been disputed. The deal is still subject to approval from the Australian Competition and Consumer Commission, which is due to hand down its decision on December 1.

Wrapping up

Starting off with media and The Australian Financial Review reports that APN News & Media is hoping to bring a partner into its APN Outdoor business, the largest outdoor advertising business in the country. Up to a 50 per cent stake in the company would be up for grabs.

ANZ Banking Group is about to settle its legal battle with Primebroker Securities with a deal believed to be worth between $20 million and $25 million believed to be on the cards, Fairfax reports.

Meanwhile, Brambles has penned another contract win by signing a three-year service agreement with PepsiCo, worth $US45 million ($44.8 million).

Turning to resources and Credit Suisse has told Caltex Australia investors to take a breath because any potential divestment of its refinery business won't happen until 2014, The Australian Financial Review reports.

And finally, kitchen goods marketing company McPherson's has announced plans to split in two, creating separately listed consumer products and printing businesses.