BREAKFAST DEALS: Hanlong snare

Hanlong's escalating legal mess looks fatal for a Sundance deal, while Qantas and Emirates anticipate the ACCC's final tick.

Sundance Resources might finally watch the sun set on its Sichuan Hanlong Mining takeover talks, with the suitor’s chairman now reportedly being held in relation to hiding a brotherly murder suspect. Qantas Airways is reportedly set to receive final approval for its Emirates alliance later this week. Meanwhile, Atlas Iron is apparently close to a Fortescue haulage deal, Billabong International might at long last get a takeover offer this week and the Clem Jones Tunnel could be going up for sale.

Sundance Resources, Sichuan Hanlong Mining

Africa-focussed iron ore hopeful Sundance Resources now looks like it has no choice but to finally call off its laborious takeover discussions with China’s Sichuan Hanlong Mining amid reports that its suitor’s chairman could be facing serious charges.

Reports out of China indicate that Hanlong chairman Liu Han, detained last week initially on reports of money laundering offences, is now being held for helping hide his brother, who is a murder suspect.

Liu’s brother, Liu Yong, is being investigated in relation to a triple-homicide, according to Chinese media.

Whether you believe any of this is kind of irrelevant. For Sundance shareholders the question is, as it has always been, can they reasonably expect Hanlong to get the $1.3 billion deal over the line?

Sundance shares remained suspended from trading as the company continued efforts late last week to engage Hanlong about the situation with its chairman and the approval process with China’s powerful National Development and Reform Commission.

Hanlong is supposed to receive an approved term sheet from financier China Development Bank for the $1.3 billion proposal by tomorrow. Given that it seems farcical for the company to receive such approval now of all times, that might be the ideal time to put an end to this spectacle.

Qantas Airways, Emirates

Qantas Airways and Emirates are scheduled to officially launch their historic alliance on Sunday – there’s just one problem. The pair hasn’t received clearance for take-off from the consumer watchdog.

No matter. According to media reports, the Australian Competition and Consumer Commission is due to hand down its final decision on the proposed tie-up on Wednesday.

The Australian Financial Review understands that final approval will be granted after Qantas and Emirates pledged not to lower their combined trans-Tasman capacity.

This is hardly surprising; the writing was on the wall from the beginning that New Zealand was the competition regulator’s primary concern with the Qantas-Emirates deal.

The Australian Financial Review reports that the pair has also pledged to increase the number of trans-Tasman seats if load percentages and profitability reach certain levels.

Atlas Iron, Fortescue Metals Group

Atlas Iron executives have reportedly left analysts with the impression that a haulage deal with Fortescue Metals Group will be done within three months.

Fairfax reports that the Bank of America Merrill Lynch analyst Peter O’Connor told clients “they expect to make an announcement on this in the next two-three months,” after meeting with chief financial officer Anton Rohner.

The news comes at a crucial time for Atlas and Fortescue. The latter is of course famously looking to sell a stake in its port and rail assets, housed in The Pilbara Infrastructure, worth up to $3 billion.

The former is central to the feasibility study being conducted by haulage company Aurizon for a rail line for the Pilbara operators that aren’t one of the big guns.

While Aurizon is still conceptually keen on the idea, it all comes down to what the iron ore price is going to do.

As Business Spectator’s Stephen Bartholomeusz explained last week, the Goldman Sachs report arguing that the swing into a market surplus of iron ore could very well happen sooner than 2015-16 threatens the lower-margin operators.

Billabong International

As expected, there was some short-covering at Billabong International late last week as speculation that its two bidding consortiums had pulled the plug turned out to be wrong.

Billabong shares rallied 7.9 per cent to finish Friday’s session at 75 cents each after the embattled surfwear company said the Paul Naude-Sycamore Partners and VF Corporation-Altamont Capital Partners consortiums were still in the data room.

It should be pointed out that while the stock did recover, it didn’t get anywhere near the 81 cents that it was trading at before the false reports of failed bids emerged.

To put it simply, many investors were still unwilling to buy Billabong’s story on Friday.

Due diligence has gone on far longer than typically expected. At long last, it looks like this week will be the one where Billabong’s direction could be decided with an actual takeover offer, rather than an indicative proposal.

Wrapping up

The upheaval in tollroad projects continues.

The Australian Financial Review understands that lenders of RiverCity have been asked to give the green light to a $600 million sale process for the company’s Clem Jones Tunnel.

The newspaper says buyers could be officially offered the asset as early as next week.

And finally, Jindal Steel & Power says investors in ASX-listed Gujarat NRE Coking Coal will only have until Thursday March 28 to accept its $275.2 million takeover offer. The original date was set for March 29, which is Good Friday.

And Jindal isn’t feeling the holiday cheer. It won’t be extending the offer, even though acceptances are only sitting at 28.8 per cent.

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