BREAKFAST DEALS: Macmahon mirage?

Macmahon gets into a spot of bother over an apparent rival offer, while Whitehaven shareholders get no comfort from the ASX.

Macmahon Holdings shares are up 18 per cent this year, but the company is busy fending off accusations from an Indian-owned company that there was a rival deal, kind of. Meanwhile, Whitehaven Coal shareholders are still reeling from a deal that was flat out fictitious. Elsewhere, Emirates is dreaming of a bigger deal with Qantas, although it’ll have to get beyond the ACCC, and Becton Property Group is clearing the record on its debt situation.

Macmahon Holdings, Leighton Holdings, Sembawang Engineers

Mining services company Macmahon Holdings is under pressure for apparently denying due diligence to an Indian company with a superior offer for its construction business late last year.

Macmahon entered into an agreement to sell the troublesome arm for $20 million to Leighton Holdings in December. Leighton also owns 19 per cent of Macmahon, so the deal made sense on a number of levels.

Since then, India’s Sembawang Engineers has claimed that it also made an offer for the business in November, but Macmahon said it couldn’t open the books up without the permission of Leighton.

Macmahon countered yesterday that the only time it has received a proposal from Sembawang was through its unsolicited, conditional announcement on January 3.

While the Indian company is consulting with its lawyers, the only apparent evidence it can produce is an email to Macmahon in November about an interest in purchasing the whole business.

Whitehaven Coal

It’s perhaps worrying for investors hoping that 2013 will be a better year for M&A than 2012 that two of the first deals stories for the year relate to proposals that don’t exist.

While Macmahon deals with the Sembayang situation, Whitehaven shares have thankfully recovered the losses from the fake ANZ press release stunt conducted by environmental activist Jonathan Moylan, and they’ve stayed there.

But the Australian Securities Exchange has unsurprisingly rejected the notion of cancelling the trades made on the basis of that false press release pertaining to be from ANZ Bank notifying that it had cancelled $1.2 billion of funding for the Maules Creek mine on environmental grounds.

ASX does have provisions to take into account mischief of this variety, but the threshold for share price movements is 10 per cent. The Whitehaven share price plunge was below 9 per cent so no action will be forthcoming.

The problem for the ASX is traders acted on information not distributed through the exchange, but published on websites including this one.

Qantas Airways, Emirates

Emirates president Tim Clark says his airline will only push for an extension of the alliance with Qantas Airways if the Australian management support the move...and the competition regulator’s approval.

In an interview with Bloomberg yesterday, Clark raised the idea of extending the alliance beyond flights between Australia and Europe into an arrangement that could include trips to Los Angeles.

"If the timing is right and the two aircraft meet, with Qantas and Emirates you could go around the world with A380s, which is a cool proposition,” the Emirates boss told Bloomberg.

"I’m sure we could do trans-Pacific business on Qantas metal as part of this overall deal.”

It needs to be said that this step is a few cobblestones down the road. Qantas and Emirates have only just won initial approval from the competition regulator for a 5-year alliance, half the timeframe originally sought.

While that initial approval is effectively a green light for the two airlines to start paring up, the Australian Competition and Consumer Commission was particularly concerned about flights between Australia and New Zealand. Basically, the two airlines can’t do business on those routes.

Qantas has to some extent built its global reputation on its flights between Australia and the United States. Following the cancellation of Singapore Airline’s non-stop flights to Newark Airport in the American state of New Jersey, the title of the world’s longest non-stop flight returned to Qantas for its services from Sydney and Dallas.

The two carriers have the option of exploring an extension of the alliance, but it’s certain that such an extension would need the approval of the ACCC.

Wrapping up

Becton Property Group has clarified comments from aspiring director Darren Olney-Fraser about its debt facilities.

The embattled company said in a statement yesterday that it is not in breach of its debt facilities, which are now held by Goldman Sachs and Fortress Investment Group.

"Becton will continue to work with its new lender with a view to providing a stable capital structure for the company,” the company said in a statement.

Mariner Corporation’s Olney-Fraser, who is jockeying for a board position, made comments earlier about the prospect of the company’s troubles hitting property values.

Nine Entertainment has been handed a preliminary BB credit rating from Standard & Poor’s as it looks to raise debt.

The refreshed network, under its new hedge fund owners, is looking to raise around $700 million in the US.

Again, we’re aware that reports Nine would emerge from its restructure without any debt were terribly premature.

And finally, Ausenco has picked up a three year deal to provide deliver services for Newcrest Mining’s Lihir operations in Papua New Guinea.

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