BREAKFAST DEALS: Miner alliances

Miners prepare to network at the Diggers and Dealers conference, while speculation abounds over BHP's nickel business.

More than 2,000 big-name mining representatives will converge on Kalgoorlie today for the annual Diggers and Dealers conference, and this year in particular deals will be on the agenda. Expect plenty of handshakes around the banquet table. Meanwhile, there are doubts about the rumoured sale of ACP Magazines, and suggestions BHP Billiton might nix Nickel West.

Diggers and Dealers

Lower metals prices and concerns about China haven't hurt ticket sales for the Diggers and Dealers conference, which will bring 2,400 resources representatives under the same roof in Kalgoorlie today through Wednesday. Indeed, the pervading gloom seems to have increased miners' natural itch to network.

Bill Beament, managing director of Northern Star Resources, expects more handshakes at this year's event, as junior explorers struggle to raise capital alone in these tougher times. Tie-ups aren't just about synergies any more, they're about survival.

"There will be more talk of deals, rather than exploration and growth, because they are the two words no one wants to know about," Beament, who is speaking at Diggers for the first time this year, told The Australian.

This year's keynote address will be delivered by Rodrigo de Rato, former manning director of the International Monetary Fund. The metal-studded line-up also includes dealmakers such as Fortescue Metals Group chief Nev Powers and Sandfire Resources managing director Karl Simich, among many, many others.

Simich's dinner-table conversations will be of particular interest, given recent hints he might use cash from Sandfire's soon-to-be-commissioned DeGrussa copper mine in Western Australia to fund acquisitions in Australia, Africa or South America.

Simich recently told The Australian he had held "cursory discussions with some smaller entities" on buyouts, as more bargains present themselves. Some of those companies are sure to bound to be in attendance.

At big conferences, small miners grow. And you'll find all the details here.

BHP Billiton

At the bigger end of town, there is renewed speculation BHP Billiton might exit the nickel business, after the miner booked a $450 million impairment on its Nickel West unit last week.

The Australian Financial Review notes BHP chief Marius Kloppers has changed his tune when discussing the potential sale of the business. In December, Kloppers said there were no plans to divest the nickel business. Now, things seem less certain.

"I really can’t talk about any specific asset plans," Kloppers said on Friday, when asked whether BHP would consider selling Nickel West. "I can say as we’ve said before that that is not an area of incremental capital deployment.”

If BHP were to sell Nickel West, which it picked up as part of its $9.2 billion WMC Resources buyout, it would need to find a buyer with deep pockets. Analysts reckon Glencore-Xstrata might fit the bill, should the companies' merger proceed.

Bauer Media Group, Nine Entertainment

Talk about the potential sale of Nine Entertainment's ACP Magazines is getting louder, but there are reasons to doubt the rumours.

Recent reports suggest the iconic publisher behind Australian Woman's Weekly, Cleo and Woman's Day was in advanced talks with a German-cased suitor, Bauer Media Group. The Daily Telegraph said ACP could change hands "within days," citing a company source.

Nine would certainly welcome the cash. The media company has been scrambling to refinance $2.8 billion in debt that falls due in February. Its parent, CVC Asia Pacific, risks losing control to the hedge funds that own Nine's loans.

Of course, Bauer is just the latest in a line of potential suitors said to have kicked ACP's tyres. Kerry Stokes' Seven West Media, Telstra and WIN boss Bruce Gordon have all previously been named as possible buyers.

However, business sources told The Australian an asset sale would be unusual, as lenders in these circumstances found it difficult to approve a divestment like this. Others doubted there would be a deal.

In any case, we may no more soon. A Bauer spokesperson told The Telegraph the company is preparing to issue a statement.

APA Group, Hastings Diversified Utilities Fund, Pipeline Partners Australia

There's new pressure for APA Group to make official its proposed $1.33 billion bid for Hastings Diversified Utilities Fund, after the target's independent directors said they would continue to back a lower offer from Pipeline Partners Australia.

However, HDF continues to work positively with APA, which is still negotiating access to HDF's books.

APA last month sweetened its takeover offer to at least $2.50-a-share in cash and scrip, subject to successful completion of due diligence. That's substantially higher than the roughly $2 it offered in December, and also technically superior to PPA's all-cash bid, worth $2.325 per security.

But HDF's controlling entity, Hastings Funds Management, says there is no certainty that APA will formalise its revised offer. For now, it says PPA's binding bid is the highest value choice for shareholders, noting the cash price.

For its part, APA seems committed. Last week the bidder was considering raising $350 million through a subordinates notes offer to help fund its HDF ambitions, although nothing had been finalised.

HDF's share price, at $2.55, suggests investors hold out hope for an even higher bid.

Wrapping up

Leighton Holdings' information technology businesses may soon hit the chopping block, as the struggling construction company seeks to strengthen its balance sheet.
Leighton is believed to be searching for advisors for a strategic review of all the company's non-core assets, but particularly IT divisions NextGen, Metronode and Infoplex, according to The Australian Financial Review. Its stakes in Devine, Sedgman and Macmahon Holdings may also be put on sale.

Leighton has been trimming since it announced major writedowns on the Airport Link and Victorian Desalination Plant projects, which hit the company's balance sheet hard. Last month, it sold its Thiess Waste Management division to Germany's Remondis for $218 million.

Watch for more details when Leighton releases its half-year results on Tuesday.

Elsewhere, DuluxGroup's slow march on Alesco continues, as the hostile suitor grows its stake in its target.

On Friday, Dulux said it owned 35.4 per cent of Alesco, or 33.4 million shares. The Australian Financial Review understands the interest will creep above 39 per cent in the days ahead, as major stakeholders Northcape Capital and Wilson Asset Management hand over their shares.

What's more, WAM continues to buy shares on the market, according to The Australian Financial Review.

Dulux's cash bid, worth $2.05 a share, is currently before the Takeovers Panel. Each side has made complaints about the conduct of the other.

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