BREAKFAST DEALS: Macquarie wings it

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Macquarie is thought to be bidding for a $US3.5 billion aircraft portfolio being sold off cheaply by American International Group.

Macquarie Group, American International Group

Macquarie Group has kept quiet on a report it is believed to be among first bidders for a $US3.5 billion aircraft portfolio. The portfolio is expected to be sold by the debt-laden American International Group for a realised loss. The silver donut – inspired by moribund pricing and a desire to boost its years-old aircraft leasing business – might face competition from the Hong Kong Aviation Company, according to The Australian Financial Review, with private equity firms and the Bank of China also among possible interested parties.Hong Kong Aviation Company snapped up Allco Financial Group's aircraft operations last year.

Chinalco, Rio Tinto, Ivanhoe Mines

Chinalco is planning some major international deals this year, with coal, copper and rare metals on the radar as the Chinese aluminium giant furthers its international mining ambitions. President Xiong Weiping has told Reuters that Chinalco will make some "breakthroughs in overseas developments” this year. A wholesale business and coal business are underway, he told the wire service, while construction on its Peruvian copper project will start during the middle of the year and progress is expected on its Saudi Arabian aluminium smelting joint venture. Xiong also flagged Chinalco's interest in the multi-billion-dollar Mongolian copper-gold project, Oyu Tolgoi, which is being developed by Rio Tinto and Canada's Ivanhoe Mines, arguing China's proximity to Mongolia and Chinalco's position as China's biggest non-ferrous metal company would be advantageous to the joint venture partners. Meanwhile, the Sydney Morning Herald is reporting that talks between Rio and Chinalco have reached an advanced stage in regards to a joint development of the Simandou iron ore field in Guinea. The talks, taking place in Beijing ahead of this weekend's China Development Forum, centre on the $US12 billion development, although others topics include iron ore exploration within China and bauxite and alumina refining in North Queensland, the paper says. Rio has high hopes for the Simandou project, dubbed a couple of years ago as the world's "top” undeveloped iron ore deposit, but the project has been beset with security and political problems. In any event, the president's comments follow a report by China's State Council, seen by The Age, which effectively exonerated Rio Tinto's decision to eschew a controversial tie-up with Chinalco in favour of a $US15 billion rights issue and iron ore joint venture with rival BHP Billiton. Indeed, last year's failed deal – which would have seen Chinalco boost its Rio holding to 18 per cent and take stakes of up to 50 per cent in the dual-listed miner's key assets – has not dimmed its enthusiasm for international plays, Xiong told Reuters. Nor is the state-owned company planning to selldown its 9 per cent stake in Rio, despite rumours to the contrary. Chinalco is now believed to be looking for a seat on Rio Tinto's board.

Cochlear

Debates about whether hearing implant maker Cochlear should make a play for Siemens' hearing aid unit may prove academic, with sources telling Reuters the German giant is scrapping the sale because a sufficient price has failed to materialise. Siemens, which is said to want two billion euros for the business, is tipped to make a formal decision this week. The sale was believed to have attracted the interest of a several private equity firms, with Cochlear understood to have teamed up with KKR and Hellman & Friedman.

Arrow Energy, Liquefied Natural Gas

Liquefied Natural Gas has reportedly stopped work at its Fisherman's Landing project in Gladstone, as Arrow Energy continues takeover talks with Royal Dutch Shell and PetroChina. LNG, which entered a trading halt yesterday, has told The Australian Financial Review it decided late last week to halt site activities until ownership issues are resolved, with an earlier deal granting Arrow 100 per cent of the Queensland project thrown in doubt by the $3.3 billion offer. With Shell expected to dump the project altogether in favour of a bigger facility should its joint offer succeed (and LNG unable to fund development on its own), the company says it's willing to adapt to changing circumstances. Managing director Maurice Brand has told Bloomberg it is "very determined” to go ahead with Fisherman's Landing and willing to cast the net further if Arrow does not provide the gas or go ahead with the earlier takeover plans.