BREAKFAST DEALS: Leighton latest & Rio moves

More heads look set to roll at Leighton Holdings with the ascension of Hamish Tyrwhitt as new CEO tipping the balance of power in the favour of ACS and Wal King's chosen ones. Meanwhile, a handy sweetener takes Rio Tinto and Mitsubishi's offer for Coal & Allied across the line, BHP Billiton continues shifting coking coal customers from quarterly to monthly contracts and nervous QR National shareholders will no doubt have some questions for their board as BHP pursues an ambitious infrastructure strategy in Queensland. In other news, ACCC boss Rod Sims talks tough despite the recent Metcash setback, Fairfax Media gets the ball rolling on the Trade Me float and ASX chairman David Gonski lashes out at critics of his decision to appoint former Tabcorp boss Elmer Funke Kupper as the bourse operator's new CEO. Elsewhere, the Woolworths-Bunnings hardware war may have to wait a touch longer and ANZ may have eyes on some Japanese targets.

Coal & Allied, Rio Tinto, BHP Billiton  

One always had a feeling that the takeover of Coal & Allied by parent company Rio Tinto and major shareholder Japan's Mitsubishi was always going to go down the road of a sweetener on behalf of the suitors followed by a prompt positive recommendation by the target. The chances of a rival bid for CNA were always remote and the only real sticking point was the issue of a fully franked special dividend pushed by minority shareholders Perpetual and BlackRock. Well, Rio and Mitsubishi have managed to allay all concerns with the announcement of an $8 a share fully franked special dividend and raising the cash offer from $122 a share to $125 a share. The new offer values CNA at $10.8 billion and is a 39 per cent premium to the target's closing price on the last trading day before the suitors revealed their indicative proposal. Staying in the coal sector, BHP Billiton is moving quickly to switch its coking coal customers from quarterly to monthly contracts, with The Australian Financial Review pointing out that the mining giant has already shifted half of its customer base in the last six months. Implementing a shorter contractual timeframe has been a key focus of BHP boss Marius Kloppers, who said last week at the miner's results presentation that a move to one-month contracts not only means easier negotiations with customers but also creates liquidity and full visibility of the indicators through a traded market. The other interesting highlight of BHP's results was Kloppers' commitment to building a railway line connecting its Queensland operations to the Abbot Point coal terminal. That news has got QR National shareholders worried because BHP is essentially looking to duplicate QRN's existing infrastructure and the recently listed coal hauler is yet to renegotiate its contracts with BHP. QRN, which presents its results today, relies on the mining giant for about 40 per cent of its coal haulage volumes. According to The Australian, QRN's current contracts with BHP are about 20-30 per cent below market levels and BHP's decision to build its own infrastructure now poses a new and potentially crucial element in the haulage discussion between them. The other interested party in this scenario is Asciano, with the paper adding that Asciano's biggest investors believe that the company may seek to strike a joint venture agreement with BHP and don't expect to be left completely in the cold by the miner's proposed move. Elsewhere, Gina Rinehart may have hit the headlines last week thanks to her mysterious media moves but it looks like the sale of her coal assets in the Galilee basin to India's GVK is progressing smoothly. GVK is reportedly paying $2.2 billion for Hancock Prospecting's Alpha Coal and Kevin Corner mines and after six months of talks a final deal is almost ready.

ACCC, Rod Sims

The Australian Competition and Consumer Commission's new boss Rod Sims is evidently undaunted by the recent loss against Metcash with the new competition tsar putting his best foot forward and setting out his strategy in a piece published in Fairfax papers this morning. The piece pretty much sums up Sims' vision for the regulator and rather than being deterred by the Metcash ruling he has promised to be even more ambitious with regards to enforcement and is not worried about spending more time in courts if needed. In his first major speech since taking over from Graeme Samuel, Sims told a Law Council workshop at the weekend that he is not afraid to test the limits of consumer law even if it meant losing more cases. He will soon get a chance to back up his tough talk, which will no doubt soon be put to test as the ACCC makes up its mind about the Foxtel-Austar merger.

Fairfax Media, Trade Me

Fairfax Media has finally decided to get the ball rolling on the partial float of its New Zealand-based online auctions and classified business Trade Me after listening to analysts wax lyrical about the potential benefits of the move since April this year. Fairfax boss Greg Hywood's announcement of the move certainly hit the mark with Fairfax's ailing shareholders, who sent the stock up 7.1 per cent despite the company swinging to a massive loss for the full year. The green light from Hywood comes after UBS concluded its strategic review of its portfolio of assets. Fairfax intends to sell between 30 and 35 per cent of Trade Me through the IPO, with the funds raised to be used to reduce debt and possibly lift dividends at some point for shareholders. UBS has been appointed the sole lead manager for the float, the timing of which still needs to be finalised. (Read more about the deal in today's Tech Deals in Technology Spectator).

ASX, Elmer Funke Kupper, David Gonski

ASX Limited has found a new CEO with former Tabcorp boss and one-time top ANZ bank executive Elmer Funke Kupper taking the job to allow long-serving boss Robert Elstone to finally hang up his boots. With the planned merger with Singapore Exchange going sour earlier this year, finding a replacement for Elstone was the top priority for ASX chairman David Gonski and while he has found a worthy candidate, the move has surprised analysts and also drawn some criticism from commentators. The main reason behind the surprise echoed by analysts is that many had expected an overseas candidate to get the gong, and there is also the perception that Kupper may not have sufficient experience in running exchanges. However, the biggest criticism came not for the choice of the candidate but rather the governance issues the move has raised. The Australian's John Durie took particular exception, saying "ASX chair David Gonski has made the right choice in choosing Elmer Funke Kupper as his chief executive but the wrong call in allowing him to stay on the Tabcorp board.” The move is a breach of clause 7.3 of the ASX board charter, which prevents the ASX chief being on any other board. However, as Fairfax's CBD column points out, Gonski is not backing away, telling all and sundry that the ASX has every right to amend the charter as it sees fit.

Wrapping up

The hardware war between Woolworths and Wesfarmers-owned Bunnings may take a little longer to eventuate than we thought after the retailer's outgoing boss Michael Luscombe told shareholders last week that not only is the roll out of its Masters chain going to take longer than expected, it's going to cost a whole lot more as well. As Fairfax's Adele Ferguson points out, the sobering news will tame the expectations of the Woolworths faithful who are no doubt still digesting the dramatic slowdown in the retailer's annual growth. Woolworths is set to open the doors to its first Masters store at Braybrook in Melbourne this week but the bottom line is that the venture is not going to make any money for the next four years, and cost more than what was originally expected. As a result, new Woolworths boss Grant O'Brien will no doubt have his hands full with jittery investors going forward. Meanwhile, there is talk that Royal Dutch Shell and PetroChina's takeover target Bow Energy may have received interest from other interested parties, although that is unlikely to help it escape the embrace of the energy majors. In other news, ANZ Banking Group may be looking at a Japanese target with the AFR reporting that the bank may have its eyes on Tokyo Star Bank or Aozora Bank. Finally in big international banking news, Greece's second and third largest banks, Eurobank and Alpha Bank, are set to announce a merger to better cope with a severe sovereign debt crisis and recession. According to Reuters, the deal would create the biggest bank in southeast Europe by assets and should help the two lenders avoid turning to a state liquidity support mechanism. Given the current state of affairs in Europe this deal could be the first of many to come.