BREAKFAST DEALS: Hungry ADM

ADM still has some hurdles to jump before its GrainCorp takeover gets the go-ahead, while Brisbane's Clem Jones Tunnel is reportedly up for grabs.

Archer Daniels Midland might have won the game of hardball with the GrainCorp board, but to win the company it'll have to complete the doubleheader through some heavy pitching with the regulators. The Clem Jones Tunnel is finally going up for sale with a predictable grid of likely bidders. Meanwhile, Virtus Health is moving towards an IPO, Nine Entertainment reckons it seriously isn't joining them and QBE has raised some competitive debt in the US.

GrainCorp, Archer Daniels Midland

The seven days of due diligence that US giant Archer Daniels Midland has been granted to examine the books of $3.4 billion takeover target GrainCorp could be followed by perhaps even seven months of haggling with regulators.

Analysts raised concerns about the success of previous ADM deals and the capacity of the American company to finance the sweetened $12.20 a share offer. The sweetener comes in the form of a $1 dividend. ADM will no doubt dismiss these concerns, but what can't be ignored is the reality that the GrainCorp deal needs to get past some pretty significant international regulators.

The Australian Competition and Consumer Commission will definitely examine the implications of the deal, particularly the issue of GrainCorp's storage and port assets that currently remain open to domestic operators.

GrainCorp owns two out of three ports in Queensland, with the remaining asset controlled by Gavilon and Singapore's Wilmar International. ADM owns 16 per cent of Wilmar, which itself picked up a strategic stake in ASX-listed Goodman Fielder last year.

Agribusiness is consolidating and GrainCorp is the last real headliner.

The Australian Foreign Investment Review Board will also have to give its blessing. But the biggest obstacle will probably be the Chinese Ministry of Commerce.

Admittedly, the GrainCorp deal is smaller than other offers the ministry has made news with. But the Chinese regulator took nine months to approve the Glencore International acquisition of Canada's Viterra.

Both GrainCorp and ADM have enough of a footprint in China for the regulator to seriously hinder this deal.

ADM, which is being advised by Barclays, demonstrated patience in the six months it took to win over the GrainCorp board. To actually win the company, they'll have to match that effort.

And just as an aside – the reason why this deal finally got up after GrainCorp refused to engage at $12.20 a share is that both companies got something to take to their shareholders with the final deal.

GrainCorp chairman Don Taylor and chief executive Alison Watkins got to go to their register and say they'd secured a $1 dividend which, including franking credits, could deliver up to 43 cents of additional value to shareholders. This, however, is coming from the company's earnings – ADM has not thrown in a single dime of extra cash itself.

That's something the US giant was emphasising – the $12.20 figure that it said it wouldn't budge from remains. But some of the earnings that ADM might have won with GrainCorp are now being distributed to the target's shareholders. Assuming all goes to plan.

And finally, the chances of another bidder emerging are remote. Another reason why GrainCorp is dealing now is that it has sought out other potential bidders and come up with nothing.

That might have something to do with the 19.9 per cent of the GrainCorp register that ADM already has. With 25 per cent of the remaining register thought to be held by hedge funds baying for a deal, this proposal is it. It's just a matter of getting it past the regulators.

For more on the GrainCorp deal, check out Business Spectator's Stephen Bartholomeusz or this morning's edition of The Distillery.

Rivercity Motorway Group, Clem Jones Tunnel

Queensland's Clem Jones Tunnel is reportedly going up for sale just two months after rival toll road operator BrisConnections was forced into receivership by lenders.

According to The Australian Financial Review, investment bank Goldman Sachs and receiver KordaMentha will start advertising the toll road today, with expressions of interest due on May 13.

Queensland Motorways is an obvious candidate to purchase the infrastructure asset, which was the subject of RiverCity's $1.3 billion collapse in 2011. Poor traffic results and inappropriate corporate structures collided with catastrophic consequences.

It's also very likely that superannuation funds from home and pension funds from abroad will show some interest. It's a classic play for these investors.

Virtus Health, Quadrant Private Equity

IVF specialist Virtus Health is looking to join the booming Australian listed health sector, as it kicks off its initial public offering roadshow today, according to Fairfax Media.

IPO advisors UBS and Morgan Stanley are valuing the company at $484 million and $682 million respectively, and Virtus' owners – private equity fund Quadrant and the group's own doctors and staff – will sell down parts of their stakes with the latter holding on to about 23 per cent.

The roadshow will take in investors in Australia, Britain and parts of Asia for the equity offer, planned for May, and if the health sector continues its gondola ride upwards (the ASX200 health sector rocketed 45.6 per cent in 2012 and has put on 10.1 per cent so far this year), it could top last November's SCA Property Group IPO.

Nine Entertainment

Nine Entertainment Co is not keen to bring forward its IPO plans, no matter how desperate the local investment banking community is for a big deal, so says chief executive David Gyngell in The Australian.

Some bankers are thought to be pitching a value of around $3 billion (about the same as what former owners CVC lost on the company), thanks to fading hopes of a possible $4 billion merger with regional television and radio group Southern Cross Media.

However, subdued advertising markets is one reason not to rush Nine into a listing, while the underperforming share prices of competitors Ten Network Holdings and Seven West Media is another.

QBE Insurance

QBE Insurance has shown what it can do in the wake of a downgrade by credit ratings agency Moody's by raising $US600 million ($582.3 million) in American debt markets at competitive terms.

The Australian insurer, which has been dealing with issues in the land of the free in the wake of Superstorm Sandy, priced the five year securities at 175 basis points above treasuries in an offer that was many times oversubscribed.

For a company of QBE's size (we're in American markets where you walk with giants) as well as the rarity of the offer and the circumstances that it came in, it was a pretty good result.

Australian corporates have been getting hungrier and hungrier for the debt markets in the US and Europe, rather than raising cash at home, because the rates are very attractive.

Wrapping up

It turns we weren't blessed with the details of the planned capital raising by besieged copper hopeful Discovery Metals, which is dealing with an attack from major Chinese private equity shareholder Cathay Fortune.

The ASX-listed miner instead asked the market operator to suspend its shares from trading until Thursday at the latest, presumably to sort out whether it can bring Cathay billionaire Yu Yong back onside or soften last week's terribly structured sale proposal.

Meanwhile, embattled coal tycoon Nathan Tinkler reportedly says he's received interest from a number of parties for his Patinack Farm horseracing business, which he's pumped an estimated $300 million.

"Let’s just say there’s bad luck and there’s Patinack luck and we’ll put it down to that," said Tinkler from Doomben race track over the weekend, according to Fairfax. His promising two-year old 'Booked' chalked up a win, but Tinkler isn't expected to get more than $200 million for the asset.

Meanwhile, John Holland has picked up a $72 million contract to rebuild Brisbane’s RiverWalk, which was used by about 3000 people until the devastating Queensland floods.

And for those that perhaps wish it was still the weekend, New Zealand's Delegat's Group has purchased assets in the Barossa Valley that fell into receivership for $24.7 million.

Delegat's makes the highly respected Oyster Bay brand. Their sauvignon blanc is a bloody knockout.

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