BREAKFAST DEALS: Mac's lux buy

Macquarie buys Sal. Oppenheim's derivatives business and Westpac's chief offloads.

Macquarie Group, Sal. Oppenheim

As tipped, Macquarie Group has bought Sal. Oppenheim's derivatives business. A price was not named, but the business is believed to be worth tens of millions of euros, and should be stitched up by the end of the first quarter. The Luxembourg-based private bank has been snapped up by Deutsche Bank, which will then off-load non-core assets. Under the deal, the retail equity derivatives business will be named Macquarie Oppenheim and the local investment bank will take on more than 90 employees. The purchase is Macquarie's first in Germany, and follows the purchase of Fox-Pitt Kelton Cochran Caronia Waller in the US three months ago.

Financials

The big banks announced after market close yesterday they will pay about $NZ2.2 billion ($1.76 billion) between them to New Zealand tax authorities. ANZ Banking Group is up for $NZ413.7 million, Commonwealth Bank of Australia $NZ286 million, Westpac Banking Group $NZ190 million and National Australia Bank a cool $NZ658 million – although Westpac says its figure accounts for just 80 per cent of the full tax and interest in dispute. The banks say they hold adequate provisions for the settlement, with Westpac saying it will write back about $150 million and the Bank of New Zealand getting the ball rolling in August by announcing a provision of $NZ661 million. The big four add that while their NZ subsidiaries believed the structured finance transactions were appropriate at the time, recent legal cases – namely a High Court loss – has left them wanting to put the matter behind them. But ANZ can't walk away just yet: a residual transaction regarding $NZ27 million in primary tax has yet to be resolved.

Elsewhere in financials, Westpac chief executive Gail Kelly has offloaded 300,000 of the bank's shares. The bank says the $7 million sale is part of the management of Kelly's personal financial affairs. She now holds more than 1.3 million shares, around 720,000 options and almost 370,000 share rights. According to the Herald Sun, Mrs Kelly – the second-highest paid bank chief in Australia – is expected to use the proceeds to clear some of her debts.

Warrnambool Cheese and Butter Factory Company

There's plenty of interest in Victorian dairy company Warrnambool Cheese and Butter Factory Company, which revealed yesterday it had received two takeover offers from unnamed parties, one a sweetened offer. Warrnambool has described the two offers – priced at or slightly below $4 per share – as opportunistic, and validation of its decision to reject an initial approach received in October but only announced this month. No word from Warrnambool about the identity of its suitors, although CHAMP Private Equity has been bandied about as most likely or perhaps New Zealand dairy giant Fonterra. Other names thrown around, although considered less likely, include Lion Nathan's National Foods and dairy cooperative Murray Goulburn. A couple of brokers have made positive noises about Warrnambool recently, with the Royal Bank of Scotland increasing its target price to $3.43 (from $3.08) on the back of better dairy prices and milk volumes and likely corporate activity, while independent research house Stock Resource has said a bid in the order of $5 might be appropriate, which compares nicely with yesterday's close of $2.75. After a rough year - it posted a $19.9 million loss for FY09 – Warrnambool has reported improved conditions of late and says the dairy business is showing signs of recovery.

Great Southern, Gunns

Tasmanian timber group Gunns has been voted in as responsible entity for eight of the timber schemes run by the collapsed agricultural projects manager Great Southern. The fate of the ninth and final pulpwood scheme will be known in early January after a vote was adjourned yesterday on delayed proxy votes. The deal will see Gunns take a percentage of the 1998-2005 pulpwood schemes' net harvest proceeds when the timber is harvesting, ranging from a mere 4.5 per cent to 55 per cent. Gunns, which is looking to become a plantation-based business, has had a busy year: buying ITC Timber and an 18 per cent stake in Forest Enterprises Australia, and bidding for Timbercorp's assets. Still, it has not gained terribly much traction on the multi-billion-dollar Bell Bay Pulp Mill, saying not long ago it was working with its bankers to close project finance facilities, and was in talks with parties, including Sweden's Sdra, regarding a 40 per cent equity investment in the controversial project. A recent UBS report lowered its FY10 earnings forecasts for Gunns by 12 per cent and price target by 10 cents to $1.20, but maintained a buy recommendation on the stock. Others have expressed concerns the impact of the high Australian dollar and weak Japanese demand. The Black Tree consortium backed by the Bunnings family and advised by Azure Capital, and Perth's Pulpwood Plantations – set up specifically to invest in Great Southern assets – had also expressed interest in the Great Southern assets, but no formal offer emerged after Pulpwood did not get enough proxies across the line for a meeting.

AWB, Incitec Pivot

The AWB shareholder meeting was a fiery one, with shareholder activist Stephen Mayne lambasting the agribusiness for its loss-making Brazilian "frolic” and shareholders taking the unusual step of voting against the company's remuneration scheme. AWB, which recently sold its $2.8 billion loan book to ANZ Banking Group, has not yet succeeded in offloading the Hi-Fert fertiliser business it runs with Elders, despite recent Chinese interest. There's also been speculation that the former wheat export monopoly holder might follow ABB Grain in receiving a takeover offer from a foreign company once it gets its house in order. After a self-confessed "disappointing” fiscal 2009, AWB is now forecasting a $115 million to $140 million annual profit before tax and significant items.

Wrapping up

Babcock & Brown Power had a terrific day on the market yesterday, returning after a near six-week trading halt to close 18 per cent higher after signing a moratorium agreement with North West Shelf gas sellers and a deal with its lenders over its $2.7 billion debt load. Still, the former power station owner is expected to make some moves towards reducing its debt, most likely a cornerstone investor. Meanwhile, surfwear group Billabong International has signed a deal to buy a minority stake in online board sports retail Surfstitch, with a view to take over the whole company for an unnamed price. This follows last month's purchase of US-based online boardsports retailer Swell.com for an undisclosed sum. And coming up on Deals TV, we'll be looking at Glencore's massive IPO plans, Nufarm and much more.