Rupert Murdoch has apparently got his dealmaking hat back in the UK, with a last minute play to spoil the German owner of Random House’s desire to secure publisher Penguin Group. Meanwhile, it’s a big week for Whitehaven Coal, with the company’s board and largest shareholder seemingly at odds as the managing director’s successor is being sought. Elsewhere, Acer Energy looks like it will have to settle for the Zhongrun deal and mining entrepreneur Joseph Gutnick isn’t coming back to the ASX just yet.
News Corp, Penguin Group
Media mogul Rupert Murdoch appears to be back in the UK, with London’s Sunday Times reporting that he’s made an indication to the owner of Penguin Group that it wants to make a late "substantial cash offer” for the company.
The newspapers, which is owned by News Corp along with this website, reports that the bid could total around £1 billion ($1.56 billion), which would have the potential of overwhelming plans to tie Penguin up with Random House. News would presumably link it up in some way with its own publishing company, Harper Collins.
The duel-listed company appears on the New York Stock Exchange, but it’s headquartered in London. Moreover, Penguin is a quintessentially British publisher. Pearson also owns the Financial Times Group.
The move marks the first really big proposal that Murdoch has launched in the UK since the furore following the News Of The World phone hacking scandal scuttled his bid to assume full ownership of BSkyB in July last year. At present, Murdoch sits on 39 per cent.
Pearson says it’s still in talks with Germany’s Bertelsmann, the owner of Random House, but a deal hasn’t been done yet.
Whitehaven Coal, Nathan Tinkler
This week looms as a big one in the history of Whitehaven Coal.
Chairman Mark Vaile has reportedly written to shareholders criticising the behaviour of major shareholder Nathan Tinkler, who last week threatened to use his 19.4 per cent stake to attempt to roll almost the entire board.
Vaile, a former deputy prime minister, made sure shareholders were aware that all the information that Tinkler demanded was delivered in the company’s September quarter report.
"The Whitehaven board does not understand the motivation for the Tinkler Group demands and remains concerned at the way these demands were made and published; and the disruption and uncertainty this has caused for the company’s customers, employees, joint venture partners, financiers, community stakeholders and shareholders.’’
Separately, Whitehaven shareholders received word that the succession planning was underway for the replacement of managing director Tony Haggarty, but that it is in the "early stages”.
"Mr Haggarty has not advised the board of a particular date for relinquishing his executive responsibilities and continues to lead Whitehaven’s operations, development projects and assessment of various attractive strategic opportunities,” said Vaile.
This statement follows a series of reports hinting that Haggarty has had enough. While shareholders should be inclined to take Vaile at his word, at least the bit about careful succession planning, the timing is frustrating for all concerned.
Whitehaven desperately needs to reclaim a sense of stability with Tinkler’s $5.3 billion privatisation bid in the rear-view mirror, a share price that’s down 42 per cent for the year and an apparently increasingly irate large shareholder that’s staring down board members.
With the annual general meeting set for Thursday, there certainly won’t be a shortage of things to talk about.
Acer Energy, Drillsearch
Acer Energy has told shareholders not to expect a bidding war. It looks like the pre-emptive strike from suitor Drillsearch has done the trick.
Drillsearch lobbed a 25.5 cents takeover offer earlier this month, but increased that to 28.5 cents a share, or $132.3 million for the lot, when it looked like a rival proposal was emerging.
Acer, a Cooper Basin explorer, didn’t announce just who it was talking to but it’s widely assumed that Senex Energy had a hand in it, with 7.6 per cent of the register in its pocket.
The problem for Senex is that Drillsearch has 19.9 per cent of the register in its pockets after winning the favour of major shareholder Republic Investment Management. The Singaporean company also intends to sell its remaining 18.8 per cent to Drillsearch.
While Acer is still urging shareholders to take no action until they’ve been able to evaluate the offer properly, the original bidder is in the box seat and they know it.
"In light of Republic's acceptance of the revised Drillsearch offer, it is unlikely that the alternative proposal in the form that was being proposed will be progressed further,” Acer said in the statement on Friday.
Echo Entertainment, Crown, James Packer
Echo Entertainment is reportedly considering the option of building its own VIP facility within striking distance of its existing casino in Sydney, The Star.
The Australian Financial Review understands that Echo has talked about constructing such a facility at Darling Harbour’s Habourside shopping centre.
As has been reported absolutely everywhere since gaming billionaire James Packer won over both sides of NSW politics over his $1 billion Barangaroo project, Echo needs to come up with a compelling gameplan to counter their new rival when exclusivity expires in 2019.
Echo chairman John O’Neill is well aware of this. He's been out on the front foot talking about minimising mistakes after a scandal led to the sacking of one of its mangers and the messy departure of long time director Brett Paton and chief executive Larry Mullins.
But the company’s counter-attack has to go beyond a solid PR campaign and managerial stability. Echo needs to meet Crown and Packer over the customers that they’re going after – Asian high-rollers. This could be it, or at least part of it.
Mining entrepreneur Joseph Gutnick has reportedly scrapped plans for a return to the ASX with a $20 million Paradise Phosphate float, instead opting to focus on "advanced” talks with a Japanese partner.
The Australian reports that Gutnick’s plans were pulled because of the risk aversion that’s currently in the market.
"But it will be a lot easier to raise $100 million with a strategic partner, instead of getting diluted with just a $20 million raising,” he said.
Still in resources, Resolute Mining now looks like it has to turn back to Chinese investment group Zhongrun, which has a deal on the table to recapitalise the company that could deliver it 51 per cent of the cash-strapped company.
Resolute was pushing for major shareholder Noble Group to fork out for an $85 million convertible note, but this doesn’t look like it’s going anywhere at the moment.
And across the Tasman, New Zealand’s Fonterra Cooperative has published the prospectus for its $NZ500 million ($394 million) shareholders fund, which reveals the indicative price range is $NZ4.60 to $NZ5.50.