BREAKFAST DEALS: Hunting Healthscope

International trusts eye Healthscope's large portfolio of hospitals, while Norton recieves a golden Chinese offer.

Healthscope is looking particularly well this morning – at least in the eyes of deal-hungry international real estate investors. Rumour has it that a handful of property trusts have taken a look at Healthscope's big hospital portfolio, and the company's private equity owners have good reason to sell. In the US, Macquarie Group's making a big bet on infrastructure in an attempt to capitalise on past success, and perhaps to put bad headlines behind it. Meanwhile, Citigroup sizes up bidders in the battle for Ten Network's Eye Corp division, and China casts an eye over Australia's gold sector. Elsewhere, Genworth Australia takes a step closer to the Australian Securities Exchange, as RBS Morgans fights for survival.

Healthscope

There is growing speculation that Healthscope's hospital portfolio could attract a bid worth around $1 billion, amid reports US and Asian real estate investment trusts have come knocking. And while Healthscope's advisor, Macquarie Capital, has not committed to selling the company's collection of 29 hospitals, it is understood to be investigating the option, according to The Australian Financial Review.

The logic of a deal rests on Healthscope's private equity owners' desire to move capital from the company's real estate portfolio into the more lucrative operating business – although the group's comfortable five-year, $1.55 billion debt facility means there's no pressure to act. America's Health Care REIT and Ventas, which made a combined $17 billion in acquisitions in 2011, plus Singapore's Parkway Life REIT, could be potential buyers. But there is also talk of Macquarie taking control of the portfolio by launching a managed fund of its own.

Macquarie Group

Speaking of Macquarie, the investment bank appears to be planning a big US shopping spree: sources have revealed to Dow Jones newswires that the silver doughnut is planning to raise a $US2 billion North American infrastructure fund this year. It would be Macquarie's third fund investing solely in infrastructure in the US and Canada, where its average gross internal rate of return is said to be north of 20 per cent – not that you'd know it, given the firm's headline-dominating failures in securities and capital. A $2 billion fund is unlikely to do much to turn around the investment bank's fortunes, but it could be a start.

Ten Network, Eye Corp

The paint has barely dried on the 'for sale' sign hanging on Ten Network's Eye Corp business, but analysts are already saying the outdoor advertising unit could be worth more than we first thought. Citigroup is now out with a note suggesting the unit could fetch between $129 million and $165 million, based on calculations surrounding oOh!media's takeover two months ago. Previous estimates put Eye Corp at the lowest end of that range.

Citi also weighs expected bidders JCDecaux, APN News & Media and oOh!media, which are each said to have submitted initial proposals. The bank reckons all parties are credible buyers with funding available, and forecasts cost synergies of between $4 million and $13 million, depending on who takes it. It does note that the Australian Competition and Consumer Commission could scrutinise any bid by APN News & Media – but let's not get ahead of of ourselves.

The report has, however, reignited speculation about the broadcaster using the proceeds from a potential sale of Eye Corp to purchase DMG Radio, owned by Ten chairman Lachlan Murdoch. Of course, such a move would raise loud questions about why Ten would swap into radio at a time when outdoor advertising is doing much better – and let's not forget the related party issues. In short, don't hold your breath.

Norton Gold Fields, Zigin

In a sign of what's said to be a growing Chinese interest in Australian goldminers, Western Australia's Norton Gold Fields has received a $250 million buyout offer from it's biggest shareholder, China's Zijin Mining. Under the indicative bid, which sent the target's shares rocketing yesterday, Norton shareholders would be given 27 cents per share, including a special 2-cents-a-share dividend from Norton. All up, it represents a 46 per cent premium to where Norton was trading before it entered a trading halt on Friday.

Norton's chief Andre Labuschagne reckons its an attractive offer, but the board is keeping its options open. The deal is also contingent upon a minimum 50.1 per cent shareholder acceptance level and clearance from Chinese and Australian regulators. It should be noted that, as part of an earlier transaction, Zijin was given permission to lift its stake in Norton to 19.9 per cent (it currently owns 17 per cent).

Perhaps the most interesting aspect of the deal, though, is that Zijin is expected to use Norton as an Australian acquisition vehicle. If the sale goes through, the combined group will be one to watch for future buying action. And even if Zijin can't snap up Norton, the Chinese bidder has loudly made known its interest in local gold producers.

For now, Norton is being advised by Merrill Lynch and HopgoodGanim Lawyers, according to The Australian Financial Review.

Flinders Mines, Magnitogorsk Iron & Steel

Russian steelmaker Magnitogorsk Iron & Steel is stumbling ahead of the last big hurdle to its $554 million takeover of Flinders Mines, after a Federal Court hearing to approve the deal was delayed indefinitely. According to Dow Jones, Flinders was forced to request that the case be adjourned after one of Magnitogorsk's shareholders secured an injunction in Russia to delay the buyout, arguing that it represents a risk to their investment in the company.

While it's unclear precisely where the Russian developments leave the deal, the news will come as a blow to Flinders investors who had already cleared offer alongside Australia's Foreign Investment Review Board. The cash offer of 30 cents per share represents an 80 per cent premium to where Flinders was trading when the deal was launched, on November 25.

Genworth Australia

Investors waiting for a slice of Genworth Australia will be pleased to note that the mortgage broker has begun bulking up his board in preparation for its initial public offering. So far it's picked up Ian MacDonald, a former National Australia Bank executive who also sits on the boards of Elders, as a non-executive director, and has also appointed existing board members Gayle Tollifson and Tony Gill as the chairs of its audit and risk and capital investment committees, respectively.

It's a good sign for the float, especially considering reports last week that the company was considering pushing back the offer. For now, bets are still on for an $800 million IPO around June. Goldman Sachs, Macquarie Capital, UBS and Commonwealth Bank of Australia are expected to run the offer.

RBS Morgan, CIMB

It seems Brisbane broker RBS Morgan wasn't so lucky as to be included in CIMB's agreement to buy RBS' directly-owned Asia Pacific equities – although it might fight to join the bulked up Malaysian bank yet.

According to The Australian, RBS Morgan was excluded from the $15 million deal because it is only 50 per cent owned by RBS, with its staff accounting for the rest of the register. Given RBS chief executive Stephen Hester's plan to sell or shut the bank's global equity operations, a partial sale must be the preferred option for the Brisbane team – although they also have the right to match any match any outside offer. Talks continue, as Britain's RBS is said to be holding out for a higher price.

Wrapping up

Aquila Resources is making good progress with its asset sales program, offloading its 50 per cent interest in the Isaac Plains coal mine in Queensland to Japan's Sumitomo for $430 million. The two companies are also in the process of launching a joint venture in Queensland, where they would both develop some of Aquila's coal tenements. The proceeds from both deals will go towards the development of Aquila's half-share in the $5.8 billion West Pilbara iron ore project, including the construction of a 285km railway from the mine to a proposed port at Anketell Point.

Elsewhere, Origin Energy has gotten in early on an opportunity to develop Chile's hydroelectric power market, after buying a stake in Energia Austral from Xstrata Copper. As part of the deal, which leaves Xstrata with a 49 per cent stake, and Origin with 51 per cent, Origin will spend $US75 million studying the feasibility of Energia's plan to develop a 1000-megawatt grid-connected hydroelectric plant in the Aysen region of southern Chile. If it likes what it sees, it will pump in another the same amount again to bring it to a stage where a final decision can be made on whether to proceed.

This latest investment comes after Origin bought a 40 per cent share of Chilean geothermal exploration company, Energia Andina. Chile could be a country to keep an eye on – Origin's managing director, Grant King, reckons there are more attractive growth options there.

And finally, bankers still have some waiting to do before they find out who gets to advise the South Australian government on the sale of its SA Lotteries license, as the lucrative appointment is pushed back another two weeks, according to The Australian Financial Review. The best bet, currently, is Investec Securities, which firmed as favourite after advising the Tasmanian government on the sale of Tote Tasmania to Tatts Group.

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