Nine looks to make a comeback on the ASX, while Whitehaven Coal tries to seduce would-be suitor Shenhua Group.

Nine Entertainment has set a course for the ASX, according to court documents, providing that equity markets calm down and minority lenders don’t topple its restructure. Meanwhile Whitehaven Coal has reportedly told a former aspiring suitor, who just tried to fold its assets into the ASX-listed player, to try a takeover bid. What would this do for Nathan Tinkler? Elsewhere, Billabong reveals its hand this morning, Mirvac doesn’t deny it’s Australand aspirations and Commonwealth Bank of Australia adds some more Aussie.

Nine Entertainment

Nine Entertainment looks destined to return to the ASX following a $3.4 billion recapitalisation. That’s provided that the broadcaster’s minority lenders don’t successfully object to the proposal that’s before the Federal Court in Sydney.

According to media reports, court documents indicate that the plan for Nine is to launch it back onto the ASX, preferably in the next 18 months.

However, the documents also say that the Nine board will have final discretion over whether to float the broadcaster, depending on market conditions.

That’s a very fair condition, given that there’s been a series of big floats talked up in the last 12 months across a number of industries and then put off because equity markets have been too troublesome.

But it does underline the power of the incoming Nine board and once again, the hedge funds that took former owner CVC Asia Pacific to task, Apollo Global Management and Oaktree Capital, are still throwing their weight around.

Under the deal, the two US hedge funds will get the right to appoint two directors each plus one jointly to the (appropriately) nine person Nine board. That gives them effective control over the broadcaster and the timeline of its float if they continue to work together.

The minority lenders, some of which are objecting to the restructure on the basis that they weren’t consulted and don’t want to be Nine shareholders, will get to appoint three directors independently of Apollo and Oaktree. Chief executive David Gyngell may also join the board, which would bring the number of directors to that magic number nine.

The problem facing Federal Court Justice Michael Jacobson, who’s presiding over the case, is that PPB Advisory has said if this scheme isn’t implemented, the lenders are going to get a little more than bugger all. Mezzanine lender Goldman Sachs will get absolutely bugger all under that scenario. The senior debt matures in early February.

While we’re talking free-to-air broadcasters, minds were spinning during yesterday’s session when a substantial shareholder notice to the ASX indicated that Ten chairman Lachlan Murdoch and gaming billionaire James Packer had increased their joint stake in Ten to 19.9 per cent.

That’s the maximum allowable before having to put a takeover offer forward, excluding creeping provisions. Questions have been asked recently about whether some or all of Ten’s billionaire shareholders might take the struggling network private after a 67 per cent plunge in the share price for 2012.

However, calmer minds realised that this is almost certainly a reflection of the company’s $230 million capital raising. The size of their stakes will probably ebb when the retail component of the raising is completed.

Murdoch and Packer picked up 18 per cent of Ten in late 2010 at around $1.50 a share. The broadcaster finished yesterday’s session at 28 cents.

Whitehaven Coal, Shenhua Group

Whitehaven Coal has reportedly urged former Chinese would-be suitor Shenhua Group to make a full takeover offer for the company, which could potentially change the fortunes of struggling coal baron Nathan Tinkler.

The Australian Financial Review understands that Shenhua approached Whitehaven with the idea of folding its Watermark coal assets into the company, but managing director Tony Haggarty and his board told them to instead try a takeover bid.

Coal watchers will remember Shenhua was interested in Whitehaven back in early 2011 when a sales process was up and running.

Unfortunately, Beijing gave the right to bid to Yanzhou Coal instead of Shenhua, in part because Yanzhou needed to float some of its assets following the Felix Resources acquisition. Ultimately, the Whitehaven sales drive went nowhere; Yanzhou merged with the ASX-listed Gloucester to get the required assets on the exchange and Whitehaven ended up merging with Tinkler’s Aston Resources.

Tinkler as we all know is struggling with some serious debt problems (close confidants say it’s not as bad as it appears, that is saying very little). His biggest issue is that his reported $700 million in debt, most of which is held by fellow Whitehaven investor Farrallon Capital, is worth less than his 19.4 per cent stake in Whitehaven, which is his primary asset.

A full bid from Shenhua would undoubtedly change things. But also the prospect of a takeover bid might push some Whitehaven shorters, keen to help force a Tinkler exit, to cover their positions, easing the pressure on everyone concerned.

For the moment though, all Shenhua has done is ask for a fold-in deal, not a takeover proposal.

Billabong International, Paul Naude, Sycamore Partners

This morning we will discover whether Billabong International has been battered enough by its recent decline to allow due diligence for what’s probably an indicative, non-binding proposal. It’s arguably a lowball bid too.

Billabong is due to emerge from a trading halt pending an announcement on a "possible change of control proposal”.

Not a bid, a proposal. And it’s still a maybe.

That proposal is widely thought to be coming from Billabong director and president of its US business, Paul Naude, who is backed by New York private equity firm Sycamore Partners, with Bank of America Merrill Lynch providing the funding.

It’s said to be a proposal of $1.10 a share, which is a great premium compared to recent Billabong trading prices and a pretty lowball offer when compared to recent retail transactions.

Can Billabong grant Naude and Sycamore due diligence? The company has already watched TPG Capital and Bain Capital walk away at $1.45 a share. What would it do to the company to risk watching a third private equity bidder turn away at $1.10 a share.

If Billabong believes in its turnaround strategy, now might be a time to tell a would-be suitor that it needs to come up something more certain before it can see the books.

Then again, the register has been through a lot.

Australand, Mirvac Group, GPT Group

Mirvac Group didn’t deny reports that it’s considering a merger deal with Australand Property Group, which is currently receiving attention from GPT Group.

Australand shares added 2.7 per cent yesterday as the company said it hadn’t received a merger proposal from Mirvac, following media speculation.

"Australand advises that it is not in receipt of any such proposal,” the company said in a statement to the market.

Mirvac was equally brief, although not in communications via the ASX. A Mirvac spokesperson offered the following: "We are also aware of our continuous disclosure obligations and there is nothing to disclose.”

That isn’t a denial, which journalists love, but it's not a confirmation either. Still, there are however two takeaways from yesterday’s news.

Firstly, Australand’s majority shareholder, Singapore’s CapitaLand, will be encouraged by the fact that a Mirvac merger (again, hypothetical) would likely be for the whole company. GPT Group (not a hypothetical party) is hoping to avoid Australand’s residential property business.

Secondly, doubts are emerging about whether the structure of a Mirvac merger would be compelling for CapitaLand. Mirvac doesn’t have a lot of cash to work with. Unless it leverages up to pay a large cash component, which isn’t ideal at first glance, there would be a large scrip component to any proposal.

Hence, Australand shares didn’t rally out of sight, because the prospect of a bidding war is only a hope for now.

Commonwealth Bank of Australia, Aussie Home Loans

If forced to nominate the two areas the consumer watchdog is particularly wary of, the easiest choices would be supermarkets and banks.

The Australian Competition and Consumer Commission will need to give informal approval for Commonwealth Bank of Australia to boost its stake in Aussie Home Loans to 80 per cent from 33 per cent, with the option of going to 100 per cent.

The pricetag for the deal was not disclosed to the market, with media reports indicating that the initial 47 per cent will set the bank back as little as $160 million and as much as $200 million. It just depends on who you’re reading.

As The Australian Financial Review’s Chanticleer columnist Tony Boyd points out this morning, it’s a difficult task for ACCC chairman Rod Sims because the statistics determining market share in the mortgage broking market aren’t as clear-cut as we might like to think.

And as Business Spectator’s Stephen Bartholomeusz argues, CBA boss Ian Narev will be very cognisant of the fact that Aussie trades on the perception that it’s independent from the big four banks.

As such, the fact that Aussie founder John Symonds will continue as executive chairman at the lender is a crucial detail. He is synonymous with the lender and will be a much needed campaigner for the notion that Aussie can continue to provide competitive rates despite its big four rebirth.

While we’re talking financial services, about a dozen Investorfirst employees are expected to be move over to mid-tier broker Wilson HTM as part of a non-cash resource sharing agreement.

Basically, Wilson takes on Investorfirst’s adviser and analyst team and in return they’ll push client activity towards its HUB24 portfolio management software platform.

Wrapping up

Gloves and condom maker Ansell has picked up a Brazilian military clothing company called Hercules for $US77 million ($73.3 million).

Hercules, which is officially called Hercules Equipamentos de Protecao Ltda, manufactures personal protective equipment.

A brief look at most depictions of the Son of Zeus show that Hercules didn’t need protective clothing. But the strategy is nonetheless consistent with Ansell’s Latin American focus.

Meanwhile, DuluxGroup has finally secured 90 per cent of garage door maker Alesco Corporation as part of its $210 million takeover. This is compulsory acquisition territory and brings to an end the most irritating takeover battle of 2012.

Dulux is now launching a company-wide review of Alesco’s businesses.

And finally, iron ore producer BC Iron has said its $190 million deal with Fortescue Metals Group will not be impacted by the decision by Andrew Forrest’s company to sell its infrastructure assets.


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