BREAKFAST DEALS: Golden gates

Macquarie Group has chalked up a win with PMI Gold by helping to block its Keegan Resources merger, but lost its battle to keep BrisConnections alive. Elsewhere, Macmahon Holdings has opted for Leighton Holdings despite the superior headline price Sembawang Australia is offering – the decision actually makes a lot of sense. Finally, Mariner Corporation reckons Wilson HTM's share price has done quite well out of the attention it has offered. There is, however, another theory.

PMI Gold, Keegan Resources

PMI Gold shareholders have successfully prevented the precious metal company's proposed $C700 million ($674 million) merger with Canada's Keegan Resources. Now what?

Macquarie Group and Taurus Funds Management, PMI's two largest shareholders, weren't keen on the ‘merger of equals' because they thought PMI was bringing more to the proposed union than Keegan. There were also other unconvinced parties sitting on the PMI register and Taurus has just upped its stake to 7.7 per cent from 6.7 per cent.

The Australian Financial Review, which broke the news about the murmurs between Macquarie and Taurus, suggests that the annoyed shareholders could push for a board spill.

If the directors were convinced they didn't have the numbers for a merger, a board spill motion is a serious possibility. You need only 5 per cent to call a meeting.

The newspaper adds that the disgruntled shareholders believed that the deal gave too much value to Keegan's Esaase project in Guana, they weren't impressed with the idea that PMI wouldn't be the surviving listed entity and they were nervous about the final board composition.

The company was going to be called, Asanko Gold. Perhaps someone else can grab the name now.

BrisConnections

While Macquarie Group had some luck with PMI the investment bank couldn't save BrisConnections from receivership.

Seven months after the Brisbane Airport Link Tunnel opened up, BrisConnections has finally fallen over simply because not enough cars used the tollroad to allow the company to pay its $3 billion in debt.

BrisConnections is due to hand down its half-year results on Friday, but the company needed to restructure its debt burden so its auditors could sign off on the accounts.

The company said it had filed "detailed restructuring proposals” to its lending consortium, made up of ANZ Banking Group, Deutsche Bank, BNP Paribas and seven other lenders, but it all came to nothing. They've had enough and PPB Advisory has been called in.

Macquarie, which owns 46 per cent of BrisConnections, has been trying to play its way into this hand by picking up $300 million in BrisConnections debt late in the piece, followed by another $300 million slice.

Macmahon Holdings, Sembawang Australia

Mining services company Macmahon Holdings took a 5.6 per cent hit yesterday following its decision to reject a rival proposal for its construction business, which is headed to major shareholder Leighton Holdings.

Leighton is taking the troublesome construction projects off Macmahon for $25 million. Sembawang Australia, a subsidiary of Indian conglomerate Punj Lloyd, waited a strange amount of time to lodge a not-so-small handful of offers way too late in the piece. Finally it came up with a more-or-less unconditional offer of $35 million.

Macmahon says this proposal cannot be "practically implemented” and is "not superior” to the Leighton deal.

That might seem strange, but their logic is revealing.

"It requires Macmahon to retain significant exposure and risk as an ongoing contracted party to construction projects being sold,” the company said in a statement.

That probably underlines just how much Macmahon wants out of the construction business and how troublesome Sembawang's unreliable approaches have been.

Macmahon copped profit downgrades last year as the construction projects went awry. The stock is down 53.7 per cent over the last 12 months.

The company wants – needs – to get out. The fact that a major shareholder that has provided support for Macmahon during this time will be picking up the business is a nice detail.

The vote on the Leighton deal is set for February 26.

Wilson HTM, Mariner Corporation

Stockbroker Wilson HTM was in fact able to claim victory over Mariner Corporation with the suitor having to embarrassingly remove its two-for-three scrip offer because of a ‘technicality'.

Mariner chief executive Darren Olney-Fraser confirmed for the market yesterday that the letters sent to Wilson HTM shareholders on February 14 notifying them of the extension of its offer to June 28 – a stupidly long period of time for a takeover offer – were "defective”.

That letter was sent out a day before Mariner's offer was to expire; hence it had no time to correct.

"All acceptances received before that date, or subsequently, are void and will be returned in accordance with section 650G of the Corporations Act,” said Olner-Fraser.

That won't be much of a logistical problem, as acceptances for the scrip offer totalled less than 1 per cent.

When Olney-Fraser first dropped a bid four months ago, it was worth $24.5 million and the scrip between the companies was comparable at those ratios. It wasn't a great offer, but it was comparable.

Since then, Mariner's stock has tanked to the point where it has a market cap of just $4.2 million. Wilson HTM is sitting on $38.8 million.

When asked about this, Olney-Fraser told The Australian Financial Review that Wilson HTM shareholders had done "very well” from Mariner's attention. The stock is up around 70 per cent since the day Mariner arrived.

Well, you can choose to believe that. Or, you could have a look at the ASX200 from December 13, when the stockbroker's share price really started to surge.

Almost all the gains for this bull market have come during this window.

Wrapping up

Now that APN News & Media has a new chief executive and chairman – Vincent Crowley and Peter Cosgrove – the issue of the company's debt levels will need to be addressed in a way other than an equity raising.

The market is expecting assets sales.

Staying with media, Southern Cross Media has managed to get through its royal phone prank scandal with its share price rising despite a profit slump.

But attention is now shifting to its regional affiliation agreement with Ten Network.

During the company's half-yearly results, chief executive Rhys Holleran said the discussions were deep and still progressing.

Also in results, Arrium's numbers were strong enough to totally justify the company's rejection of a $1 billion takeover offer from Steelmakers Australia late last year.

Steelmakers offered 88 cents a share and despite a 2 per cent share price slide yesterday on the results, they're still changing hands at $1.24. That's an unmistakable endorsement of the board.

And finally, Perth mining and construction contractor Maca is tapping the market for $56 million at a 12.3 per cent discount to the last trading price.