Breakfast Deals: Hotel review

The Abu Dhabi Investment Authority takes a tilt at Australia's largest hotel owner, while Macquarie cuts back its Canadian presence.

The domestic property sector has been treated to two significant deals in the past 24 hours: one sees a Middle Eastern heavyweight paying big bucks for Australia's largest hotel owner, and the other effectively re-writes the book on shopping centre values. Elsewhere, Macquarie cuts back in Canada, while considers a shift to Japan. And Jetstar runs into more trouble in Hong Kong.

Abu Dhabi Investment Authority, Tourism Asset Holdings, UniSuper, Westfield Group, Westfield Retail

Global investment giant Abu Dhabi Investment Authority is said to be forking out $800 million for Australia's largest hotel owner, Tourism Asset Holdings.

The deal, reported in The Australian, will give the Middle Eastern group ownership of a portfolio of 31 properties, including Novotel and Ibis Darling Harbour in central Sydney, Novotel and Ibis at Sydney Olympic Park, and Novotel Canberra.

In fact, it's one of the largest leased property portfolios of its kind in the Asia Pacific.

The newspaper says the sale, handled by Macquarie Capital, was contested by a number of international pension funds, but local superannuation giants appeared to stay on the sidelines.

The property sector will also be pleased with another major deal involving Westfield Group and its sister fund Westfield Retail, which have sold out of the $740 million Karrinyup Shopping Centre in Perth.

The pair offloaded their combined 33.3 per cent holding to UniSuper, which already owned the remaining 66.6 per cent, for about $246.6 million.

The sale is especially important because it sets a new benchmark for shopping centre values, following a tense structured sale talks between the buyer and sellers.

The price effectively re-rates the value of "fortress malls" nationally and it represented a premium of approximately 19 per cent to Westfield's book value for its non-managed interest in the centre, according to The Australian

The newspaper says it's $117 million more than Westfield's December 2012 valuation of $623 million on the entire asset.

Interestingly, the Australian Competition and Consumer Commission also cleared Westfield to take full control of Karrinyup just last week, so long as they offloaded another Perth mall, Innaloo.

That centre was to be bought by Charter Hall, which is backed by Canadian pension fund PSD Investments, for about $268 million. There's no word on that status of that deal.

Macquarie Group, Richardson GMP

There are suggestions Macquarie Group may start cutting offshore units that are deemed unviable, as the investment bank sells its retail brokerage in Canada just three years after buying the business.

Macquarie has sold its Private Wealth Canada division to Richardson GMP for $C132 million ($137.6 million) — more than 30 per cent higher than the $C93.3 million Macquarie paid for the business in 2009.

The sale won't affect Macquarie's other businesses in Canada, including corporate advisory, commodities, currencies, fixed income, funds management and institutional equities, the company says.

The sale comes as analysts urge Macquarie to consider exiting more offshore businesses, raising concerns about the company's relatively small scale overseas and structurally soft market conditions, according to The Australian., Recruit

Australian tech entrepreneur Matt Barrie could be in for a windfall, with reports he is on the verge of selling his popular start-up for $US400 million ($432.5 million).

Recruit, a Japanese human resources firm and jobs site operator, is in talks to acquire the Sydney-based site, which matches companies with individual worriers on a non-contract basis, according to TechCrunch., which is being advised by Morgan Stanley, boasts more 8 million users, and says it has generated $US1.25 billion of work for users in more than 230 countries since it launched in 2009.

TechCrunch understand Recruit approached, and that the $400 million offer is the second, higher offer that has been put on the table.

Barrie seems to be in a strong negotiating position, as is understood to be a takeover target for a clutch of players looking to expand their online business, according to the Australian.

If the sale succeeds, Barrie stands to make more than $200 million from his 50 per cent stake in the company.

Cathay Pacific, Hong Kong Airlines, Hong Kong Express, Jetstar

Jetstar is facing growing resistance to its attempt to break into the Hong Kong market, with Hong Kong Airlines and its sister carrier, Hong Kong Express, lodging filings with authorities in the Asian city opposing the budget airline's panned services there, Fairfax reports.

The clash comes after Cathay Pacific attacked Jetstar's bid for regulatory approval, claiming Jetstar Hong Kong will be in violation of the city’s constitutional law because its principal place of business is in Australia. 

Cathay also called for a "fair exchange of value to Hong Kong" for access to the city's air-traffic rights.

For their part, HKA and HKE haven't detailed reasons for their opposition to JHK – a joint venture between Qantas, China Eastern and Shun Tak Holdings – according to Fairfax.

Fusion Retail Brands, Apparel Group

Fusion Retail Branks, formerly Colorado Group, will be taken to market as a pure-play footwear retailer after the company's private equity owners sold off its JAG clothing brand.

JAG will be sold to the Apparel Group, which also owns well-known fashion labels Sportscraft, Saba and Willow, in a deal subject to completion of due diligence, according to Fairfax.

The newspaper group says private equity duo Ice Canyon and Anchorage Capital are now taking bids for buyers of the remainder of Fusion, which still owns Diana Ferrari, Williams, Mathers and Colorado.

Wrapping Up

Meanwhile, Elders has inked a deal with its lenders to extend its loan facilities until the end of 2014.

Elders says the syndicated finance facilities have been structured to service the forecast requirements of the group and will include a mixture of term debt facilities worth up to $144 million, working capital and contingent facilities of up to $87 million and a debtor securitisation facility of up to $183 million.

Elsewhere, US agribusiness giant Archer Daniels Midland is unlikely to increase its contentious $3 billion bid for GrainCorp, despite the suitor's renewed lobbying effort, according to The Australian Financial Review.

The report comes after ADM grain group president Ian Pinner arrived in Australia to make a fresh push after the company laid low during the federal election campaign.

Finally, Drillsearch Energy and Santos are officially partners on the Western Cooper Wes Gas Project, after the duo completed mutual due diligence on the joint venture.

Santos has acquired a 60 per cent interest in the project and committed to fund a $100 million to $120 million program to accelerate wet gas commercialisation.

Drillsearch expects the partnership to deliver a material result.

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