BREAKFAST DEALS: Macquarie's golden glow
The investment bank confirms a deal with Mark Bouris' Yellow Brick Road, while speculation mounts over BHP Billiton's succession plans.
What started as a rumour in a Melbourne Cup marquee has now become a very real headache for Australia's major banks: Macquarie Group has confirmed it is teaming up with Yellow Brick Road to take on the mortgage market. Elsewhere, BHP Billiton is apparently one step closer to getting rid of its chief, while Echo Entertainment has just about settled on a new one. And what's Linc Energy doing meeting with a Russian billionaire?
Macquarie Group, Yellow Brick Road
Macquarie Group is barging back into the mortgage business, after inking a deal with Mark Bouris' Yellow Brick Road that will give the investment bank access to a strong retail brand, and a skilled marketer. Macquarie brings to the table cheap funding and proven risk management skills, which it plans to deploy through YBR's existing 137 licensed branches — a number that is expected to rise significantly. It seems that Macquarie will manufacture the loans, with YBR accepting a fee to act as distributor. For now it's simply a partnership, which does not involve any equity.
The pair initially aims to lure customers with a home loan rate of 5.5 per cent for the first 12 months, and a 0.86 per cent discount on the standard variable rate for the remainder of the mortgage. Bouris has handy connections at Nine Network, where he hosted Celebrity Apprentice, which he plans to lean on to get the word out.
The alliance was clearly forged to take a shot at Australia's largest banks, but it remains to be seen whether it will make a dent in the market. Retail banking competition is already fierce, and the major banks enjoy favourable AA credit ratings, compared to Macquarie's A - A2. Still, the big four will be watching closely.
BHP Billiton
Reports that BHP Billiton is stepping up its search for a successor to chief executive officer Marius Kloppers set tongues wagging, with all sorts of speculation about why it is doing so. Here, we're more interested in which names the search will bring to the surface.
The Australian Financial Review understands BHP is considering four internal candidates, including non-ferrous head Andrew Mackenzie, ferrous and coal head Marcus Randolph, aluminium and nickel boss Alberto Calderon and petroleum boss Mike Yeager. Each is said to have been meeting with investors more than usual in the past six months.
The miner is also understood to have hired the British branch of Heidrick & Struggles to examine external candidates. It's less clear who these might be, but there is already speculation the company might consider Rio Tinto's outgoing chief financial officer, Guy Elliott, or a senior executive from BG. The AFR also notes Andrew Liveris, who heads The Dow Chemical Company, was the top external contender when BHP was hunting for a replacement for Chip Goodyear, and so might make the list again. Watch this space.
Echo Entertainment
From one headhunt to another, Echo Entertainment is rumoured to have closed in on a replacement for chief executive Larry Mullin.
The AFR understands the global recruitment search has produced one front-runner candidate, with industry sources pointing to Grant Bowie, who currently heads MGM Grand's Macau operations. Other candidates are said to include Andrew MacDonald, who heads the casino operations at Marina Bay Sands in Singapore, and Nigel Morrison, who is chief financial officer of Galaxy Entertainment Group in Hong Kong.
To be sure, it's a high-stakes search. Amid advances from James Packer's Crown, which has also been granted a license that will allow the company to compete with Echo in Sydney, the new boss will have a much greater bearing on the future of the company than might normally be the case.
Linc Energy, Roman Abramovich
When Russian billionaires fly halfway across the world they usually have a good reason, and so when Roman Abramovich arrived in Australia in his private Dassault Falcon 7X jet last weekend, deal watchers took notice.
Abramovich is said to have held secret talks with Linc Energy chief executive Peter Bond in Brisbane, before touring the company's coal gasification facilities at Chinchilla in south-western Queensland. Rumour has it Abramovich is considering investing in the Australian resources sector, or wants to use Linc's technology in Russia.
That could suit Linc — currently worth about $300 million — which has made no secret of its desire to draw in investors to help grow its global business.
Wrapping up
Genworth Financial has pushed back the $800 million float of Genworth Australia for the third time, indicating the IPO is now intended for the second half of next year, according to the AFR.
Don't hold your breath, though. The newspaper believes bankers have been pitching in an effort to find a buyer, perhaps among Australia's big four banks.
The newspaper also says Wolsely Private Equity and printing group CaxtonWeb are close to finalising a deal to buy printing company Blue Star's Australian operations, which are owned by CHAMP Private Equity.
It's still unclear how much Wolsely and CaxtonWeb are prepared to pay for the assets, which CHAMP picked up for $NZ385 million in 2006. Goldman Sachs is running the sales process.
Finally, mining juniors will be watching US-based private equity firm Denham Capital, which the Wall Street Journal says is opening an office in Perth to capitalise on the nation's resources boom. The outpost, which will be led by Denham's metals and minerals boss Bert Koth, will facilitate partnerships with smaller resources companies here.
Macquarie Group, Yellow Brick Road
Macquarie Group is barging back into the mortgage business, after inking a deal with Mark Bouris' Yellow Brick Road that will give the investment bank access to a strong retail brand, and a skilled marketer. Macquarie brings to the table cheap funding and proven risk management skills, which it plans to deploy through YBR's existing 137 licensed branches — a number that is expected to rise significantly. It seems that Macquarie will manufacture the loans, with YBR accepting a fee to act as distributor. For now it's simply a partnership, which does not involve any equity.
The pair initially aims to lure customers with a home loan rate of 5.5 per cent for the first 12 months, and a 0.86 per cent discount on the standard variable rate for the remainder of the mortgage. Bouris has handy connections at Nine Network, where he hosted Celebrity Apprentice, which he plans to lean on to get the word out.
The alliance was clearly forged to take a shot at Australia's largest banks, but it remains to be seen whether it will make a dent in the market. Retail banking competition is already fierce, and the major banks enjoy favourable AA credit ratings, compared to Macquarie's A - A2. Still, the big four will be watching closely.
BHP Billiton
Reports that BHP Billiton is stepping up its search for a successor to chief executive officer Marius Kloppers set tongues wagging, with all sorts of speculation about why it is doing so. Here, we're more interested in which names the search will bring to the surface.
The Australian Financial Review understands BHP is considering four internal candidates, including non-ferrous head Andrew Mackenzie, ferrous and coal head Marcus Randolph, aluminium and nickel boss Alberto Calderon and petroleum boss Mike Yeager. Each is said to have been meeting with investors more than usual in the past six months.
The miner is also understood to have hired the British branch of Heidrick & Struggles to examine external candidates. It's less clear who these might be, but there is already speculation the company might consider Rio Tinto's outgoing chief financial officer, Guy Elliott, or a senior executive from BG. The AFR also notes Andrew Liveris, who heads The Dow Chemical Company, was the top external contender when BHP was hunting for a replacement for Chip Goodyear, and so might make the list again. Watch this space.
Echo Entertainment
From one headhunt to another, Echo Entertainment is rumoured to have closed in on a replacement for chief executive Larry Mullin.
The AFR understands the global recruitment search has produced one front-runner candidate, with industry sources pointing to Grant Bowie, who currently heads MGM Grand's Macau operations. Other candidates are said to include Andrew MacDonald, who heads the casino operations at Marina Bay Sands in Singapore, and Nigel Morrison, who is chief financial officer of Galaxy Entertainment Group in Hong Kong.
To be sure, it's a high-stakes search. Amid advances from James Packer's Crown, which has also been granted a license that will allow the company to compete with Echo in Sydney, the new boss will have a much greater bearing on the future of the company than might normally be the case.
Linc Energy, Roman Abramovich
When Russian billionaires fly halfway across the world they usually have a good reason, and so when Roman Abramovich arrived in Australia in his private Dassault Falcon 7X jet last weekend, deal watchers took notice.
Abramovich is said to have held secret talks with Linc Energy chief executive Peter Bond in Brisbane, before touring the company's coal gasification facilities at Chinchilla in south-western Queensland. Rumour has it Abramovich is considering investing in the Australian resources sector, or wants to use Linc's technology in Russia.
That could suit Linc — currently worth about $300 million — which has made no secret of its desire to draw in investors to help grow its global business.
Wrapping up
Genworth Financial has pushed back the $800 million float of Genworth Australia for the third time, indicating the IPO is now intended for the second half of next year, according to the AFR.
Don't hold your breath, though. The newspaper believes bankers have been pitching in an effort to find a buyer, perhaps among Australia's big four banks.
The newspaper also says Wolsely Private Equity and printing group CaxtonWeb are close to finalising a deal to buy printing company Blue Star's Australian operations, which are owned by CHAMP Private Equity.
It's still unclear how much Wolsely and CaxtonWeb are prepared to pay for the assets, which CHAMP picked up for $NZ385 million in 2006. Goldman Sachs is running the sales process.
Finally, mining juniors will be watching US-based private equity firm Denham Capital, which the Wall Street Journal says is opening an office in Perth to capitalise on the nation's resources boom. The outpost, which will be led by Denham's metals and minerals boss Bert Koth, will facilitate partnerships with smaller resources companies here.
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