BREAKFAST DEALS: Miner's secrets spill

The latest dose of WikiLeak cables dishes the dirt on BHP Billiton and Rio Tinto and while the information is not ground breaking in itself it may further malign the reputation of the big miners in Beijing. The man behind Gina Rinehart's move into the media sector spills the beans and GPG shareholders face a long wait before the investment company reveals its new strategy. Elsewhere, Tabcorp may need to tap the market for extra money to fund its casino expansion in Queensland and Colonial First State joins the race for Centro.

BHP Billiton, Rio Tinto, WikiLeaks

It took its time but the WikiLeaks hit list has finally begun to shed some light on the hidden machinations of global business heavyweights with BHP Billiton and Rio Tinto in the firing line over the weekend. According to Fairfax newspapers, cables obtained by the high profile whistleblower site have revealed that BHP executives were instrumental in scuttling a proposed $21 billion investment deal between the Aluminium Corp of China (Chinalco) and Rio Tinto. It looks like BHP, which was worried that the deal would give Beijing a closer look into commercially important information, engaged in substantial lobbying which forced the Labor government, then run by Kevin Rudd, to delay its decision on the deal. This delay proved critical as improving commodity markets eventually saw Rio end talks with Chinalco and opt for an iron ore joint venture with BHP. While none of this information is especially groundbreaking given that BHP's involvement was somewhat of an open secret it does go some way in reinforcing Chinese fears that the big miners enjoy substantial clout within the halls of Canberra. These fears may now prove to be another hurdle in the way of the miners which are hoping to improve their image in China after somewhat strained negotiations over iron ore pricing. Shanghai-based steel research group Mysteel has told The Australian Financial Review that the miners are already perceived as "greedy companies” and the WikiLeaks revelation will only add to that negative sentiment. Meanwhile, another cable has reportedly shown that former Rio Tinto mining executive Stern Hu may have been convicted with the help of evidence provided by its own employer. The arrest of Stern Hu on allegations of accepting bribes and stealing state secrets was another major talking point which soured relations between Beijing and China earlier this year and the leaked cable states that Rio privately gave Chinese security authorities incriminating evidence about jailed former staff. So the ongoing WikiLeaks saga has now managed to dish dirt on Royal Dutch Shell, BHP Billiton and Rio Tinto. Next up, it looks like the turn of the global banking system and US banks.

Gina Rinehart's One Nation connection

The entry of mining magnate Gina Rinehart into the world of media is probably going to be one of the biggest mysteries this year. While the market is still trying to work out whether Rinehart's move is designed to give her a platform to voice her political views and sink the Labor government's proposed mining tax there is some news on the figures driving Rinehart's strategy. According to The Australian, Rinehart has received advice on corporate strategy from Brisbane businessman and former Pauline Hanson adviser John McRobert. McRobert, the man behind Pauline Hanson's 2 per cent Easytax policy during the 1998 federal election campaign, has told the paper that he has been an informal adviser to Rinehart and that Australia's richest woman was indeed hoping to use her investment to give greater exposure to her political views. Of course time will tell whether a board seat at Ten Network Holdings and a small stake in Fairfax Media will be enough to give Rinehart the clout that she craves. Incidentally, McRobert is currently writing a book on Rinehart's father Lang Hancock.

Guinness Peat Group

Guinness Peat Group's (GPG) new chairman Mark Johnson has reportedly warned shareholders that they face a long wait before the investment company is in a position to unveil a revamped strategy. Johnson, a former Macquarie Bank deputy chairman, has told The Australian Financial Review that GPG should have a plan in place by June next year. That's probably not what many GPG's shareholders want to hear especially after the concerted campaign to oust GPG's previous chairman and legendary share raider Sir Ron Brierley and install new governance on the board. Brierley who stepped down as chairman last Friday had copped a lot of flak from angry shareholders this year over a string of unfulfilled promises to return value to shareholders but at least the man who built the company from scratch all those decades ago has admitted that the group's corporate model was just no longer working. So it's an end of an era at GPG and hopefully for shareholders Johnson may have the recipe needed to cure the gripes that have been so prevalent this year.

Tabcorp Holdings

Tabcorp Holdings has announced the expansion of its investment program in Queensland with the gaming group set to triple its investment plans for its three casinos in the state from $175 million to $625 million. The decision to boost capital expenditure in the state comes after Tabcorp reached a deal with the Bligh government over new gaming concessions that the company says will support the long-term growth of the properties and the viability of the increased investment. The move comes as Tabcorp prepares to spin its casinos off into a separate company and Tabcorp boss Elmer Funke Kupper has told the AFR that the demerged business may have to tap the market for some cash once it begins life next year to pay for the expansion in the Sunshine State.

Tassal Group, Pacific Equity Partners, Pacific Andes Resources Development

The takeover for Tassal Group looks to be a two horse race for the time being with the salmon farmer's board finally agreeing to open channels with interested suitors – Pacific Equity Partners and Tassal's latest shareholder, Singaporean seafood group Pacific Andes Resources Development (PARD). Tassal's reluctance to engage with PEP over its $278 million bid has already proved to be a mistake with the target's shareholders turning up the heat on its management and it looks like a contrite board has now decided to recruit advisory firm Gresham to assist with the process. PEP is reportedly set to pore over Tassal's books closely but it will be interesting to see just how things pan out given that PARD, which holds a 20 per cent stake in Tassal, has already ruled out accepting PEP's initial offer. A list of likely suitors apart from the two already in the mix are said to include the world's largest salmon farmer, Marine Harvest, Canada's Cooke Aquaculture and lest we forget other private equity operators. Meanwhile, PEP's Hoyts business has now reportedly attracted a couple of overseas suitors. According to the AFR, Canada's Cineplex Galaxy and India's Pyramid Saimira Theatre have joined private equity firm Archer Capital to vie for the cinema and film distribution business. Elsewhere, the paper said PEP's has also got a couple of hungry suitors circling its poultry business Tegel, with private equity funds Affinity Equity Partners, Paine & Partners, Korea's Harim Co and a Chinese or Malaysian trade buyer all in the race.

Wrapping up

Centro Properties Group is still waiting for the indicative bids for its $13 billion portfolio of US and Australian property assets to drop by the end of this week and it looks like Colonial First State Global Asset Management has reportedly joined the contest. According to media reports, Colonial First State may be looking to rustle up a posse – which may include the Canada Pension Plan Investment Board and the Future Fund – which will go head to head with the consortium lead by property giant Lend Lease. Separately, Lend Lease has signed documents to launch the Lend Lease UK Infrastructure Fund ("the Fund”) with PGGM Vermogensbeheer B.V. (PGGM) committing over £220 million in capital to the Fund to invest in social infrastructure assets. Elsewhere, Mirvac Group is set to convert the harness-racing track Harold Park Paceway in Sydney to develop a 1200-lot, medium-density housing community. The residential development is forecast to earn more than $1 billion in revenue with development expected to start in early 2012. Meanwhile, National Australia Bank (NAB) is reportedly poised to sell its main IT data centre to IBM in a deal expected to be worth several hundred million dollars. According to the AFR, the deal will see the lender offload the bulk of its mainframe systems which were at the heart of the recent troubles faced by the bank. In overseas news, Healthscope's one time US suitor Tenet Healthcare has received a $7.3 billion offer from rival Community Health Systems in a bid to create the largest hospital operator in the US. Elsewhere, MasterCard has bought the prepaid Card Program Management (CPM) operations of Travelex for $US458 million in cash, with an earn-out of up to an additional $US55 million if certain performance targets are met. The transaction is expected to close in the first half of 2011.