BREAKFAST DEALS: Miner miracle?

Rio Tinto and BHP Billiton

BHP Billiton chief Marius Kloppers may have been given yet another reason to reignite takeover talks ahead of expected comments (Kloppers set to comment on Rio's Chinalco deal, report, May 23) on rival Rio Tinto's $US19.5 billion deal with Chinalco. That reason is a rumour spreading through London that fellow mining giants Anglo American and Xstrata may merge, a rumour given further impetus by a report late on Friday by stockbroker Nomura saying such a "merger of equals” would be "compelling". Both Anglo and Xstrata are worth approximately $US30 billion.
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Gloucester Coal

AMCI Group, a private coal mining investment group based in Zug, Switzerland, has sold its shares in Gloucester Coal, as Hong Kong-based Noble Group looks set to take control. But while other substantial shareholders, including former merger hopeful Whitehaven Coal and interests represented by Bankers Trust, have sold out, one party still on the share register is Credit Suisse, which recently bought a 5.51 per cent stake. Credit Suisse is the long-time corporate advisor to another business based in the low-tax canton of Zug: Xstrata.

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Kagara

Nickel and zinc miner Kagara may tap the market to the tune of $100 million through an accelerated one-for-two rights offer, the AFR suggests. With Kagara due to pay Western Areas $20 million in mid-June for the co-development of the companies' Lounge Lizard nickel deposit, equity capital may be the only option, considering that $192 million worth of a $200 million debt facility has already been drawn. Another option that's been on the cards for some time is the spin-off of Mungana Goldmines via an estimated $100 million initial public offer. Kagara may wish to be careful about the name's historical associations however. The so-called 'Mungana Affair' of the 1920s saw the sale of several mining tenements in the area to the Queensland government at vastly inflated prices. A Royal Commission subsequently found that two of the state's premiers secretly held 25 per cent of the properties each.

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Platinum Australia

South Africa-focused and locally-named Platinum Australia entered into a trading halt late on Friday ahead of a capital raising, said to be planned for some time before Wednesday. The company also announced a heads of agreement on Friday to acquire up to 70 per cent of a project on the Bushveld Igneous Complex in South Africa's North West Province from Atla Mining Resources, a company of the Bakgatla-Ba-Kgafela tribe. The Financial Review has meanwhile said that Platinum's capital raising is likely to be between $40 and $50 million and involve Bell Potter Securities, Royal Bank of Canada and Ambrian Capital, the latter two being the company's nominated broker and advisor respectively on the London AIM board.

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Carnegie Corporation

Wave technology firm Carnegie Corporation is also in a trading halt ahead of a capital raising. The company, which has nothing to do with the $US3 billion charitable endowment of the same name, earlier this month acquired global rights to the CETO wave-power technology it has been working on through a joint venture with Britain's Renewable Energy Holdings. The raising is expected to raise the funds for CETO's remaining development costs that cannot be met via existing cash reserves, now that these will be borne exclusively by Carnegie. Last month Carnegie signed a heads of agreement with Investec to procure $250 million in project finance.

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Bahamian oil

Alan Burns, the chairman of Carnegie, has meanwhile told the Financial Review that he is considering a dual Australian home for his AIM-listed BPC Ltd, which explores for oil in The Bahamas. Burns told the AFR that the tropical country had "exactly the same geology as the Persian Gulf" yet had not been explored in any significant way for the past 30 years. BPC back-listed on the Alternative Investment Market through Falkland Gold and Minerals in August and has a £25 million market cap. Burns founded Hardman Resources, which was sold to Tullow Oil in 2007 for $1.5 billion.
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Downer EDI

Engineering group Downer EDI is considering a New Zealand bond issue in the wake of issues such as Contact Energy's $NZ550 million offering and AMP's trans-Tasman notes issue. Last week Downer raised $222 million "from a variety of sources" to help fund its debt obligations in the coming year, and it is thought that Kiwi retail investors could help it raise a further $NZ150 million. It is believed that UBS has been appointed as lead manager for the three-year senior bond offer.
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Living Cell Technologies

Forays into the New Zealand capital markets have been less successful for Living Cell Technologies however, which has announced and subsequently scrapped a $NZ5 million raising, all in the space of a day. Boutique Auckland-based biotech advisory firm Pacific Channel was to have led the raising. It's not all bad news though, with the mayor of Invercargill, on the southern tip of New Zealand's South Island, announcing plans to invest $NZ2.5 million in the company's pig breeding facilities. Living Cell uses the pigs, each apparently worth $NZ100,000, in developing diabetes treatments.

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