BREAKFAST DEALS: Palmer's rain check

Shaky markets postpone the $3 billion float of mining magnate Clive Palmer's Resourcehouse business in Hong Kong. Interestingly enough, Resourcehouse wasn't the only miner having second thoughts about testing the waters, with lithium producer Galaxy Resources also staying put for the time being. Meanwhile, uranium stocks across the board take a hammering as meltdown fears continue in Japan, but are the fears overblown? And what does it mean for Extract Minerals and its major shareholder Kalahari Minerals? Uranium's pain can be LNG's gain with Origin and Woodside both in line to benefit. Elsewhere, Whitehaven attracts two heavyweight Indian suitors, the knives come out for Valad Property boss Peter Hurley, Qantas backs Gillard's carbon tax and Warren Buffet's M&A hunt delivers its first big prey.

Clive Palmer, Resourcehouse, Galaxy Resources

The horror scenes in Japan over the weekend have apparently proved to be the last straw for mining magnate Clive Palmer, who has reportedly postponed the $3 billion float of his Resourcehouse business in Hong Kong. According to Reuters, Resourcehouse has put the brakes on a roadshow for its initial public offering, citing volatile market conditions. Palmer, who is in Hong Kong at the moment, was reportedly set to speak to investors at a lunch last week but the event was also cancelled. Global markets, already reeling from the latest bout of political uncertainty in the Middle East, were struck another blow over the weekend after Japan's northeast coast was laid low by a massive earthquake and the resultant tsunami. With the full financial impact of the disaster yet to be fully measured, it looks like Palmer and Resourcehouse have opted to stay put for the time being. This is Palmer's third bite at the cherry and while his IPO ambitions have been dented by some justifiable nervousness the mining magnate is unlikely to call it quits just yet. Resourcehouse wasn't the only miner to put its float plans on the back burner, with lithium miner Galaxy Resources postponing its proposed $US260 million IPO in Hong Kong until further notice. ASX-listed Galaxy was planning a dual listing on the Hong Kong Stock Exchange (SEHK) at the end of the current quarter to get closer to its key customer, China, and raise funds for expansion. Both Galaxy and Resourcehouse have decided to play it safe in light of the current market volatility, however both are still undoubtedly keen to pursue a listing and will probably have to bide their time. Much of the IPO focus this year will be on the impending listing of Swiss commodities trader Glencore, which is hoping to raise over $US7 billion in Hong Kong and London in May. While the Glencore name will be an immense lure for investors, we will have to wait and see if it will be enough to convince nervous markets.      

Uranium sector meltdown

The uranium sector has taken a hammering in the wake of the nuclear meltdown fears in Japan. Local uranium stocks took a beating yesterday and their overseas counterparts fared little better overnight, with sector heavyweight Canada's Cameco sliding 15 per cent, Uranium One plunging 25 per cent and Denison falling 24 per cent. Shares in London-listed uranium explorers also took a tumble. However, the one uranium company currently in play, Kalahari Minerals, managed to limit its losses. It was a similar situation back home with Extract Resources, in which Kalahari owns a majority stake, with the miner's stock falling 7.7 per cent to $9.81, a far less painful drop than the one suffered by the likes of Paladin Energy and Toro Energy. Kalahari and Extract were both somewhat helped by the fact that the market still expects Kalahari's Chinese suitor CGNPC Uranium Resources to bid for the miner and that will bring Extract into play. The frantic scenes at the nuclear power plant in Fukushima are pretty much the sort of nightmare proponents of nuclear energy have always hoped to avoid and there is no doubt that the situation will have an adverse impact on uranium prices and miners linked to yellowcake in the short term. However, the key question is: just how long will the cloud of toxic sentiment linger? The Germans and the Americans may have their doubts about their future civilian nuclear ambitions but the likes of China and India are unlikely to close their shops. The Chinese and the Indians may have to spend a little more time and money to ensure that sufficient security protocols are put in place but nuclear energy is a key plank in the energy equation for both nations and that will support the uranium sector in the long-term.      

Uranium's loss is LNG's gain

The short-term pull away from nuclear energy and uranium should be a boost for local LNG producers and their plans to find customers and equity partners for their multi-billion dollar projects. According to The Australian Financial Review, the situation in Japan could prove beneficial for Origin Energy and its partner ConocoPhillips in securing a buyer, presumably Japanese, for the gas from their Australia Pacific LNG project. Origin has already signed a tentative offtake agreement with China's Sinopec and finding that second buyer will be a substantial step for the company in pushing through with the equity raising needed to fund the $35 billion project. The other beneficiary could be Woodside Petroleum, which has reportedly been looking for some Japanese equity partners for its Browse Basin LNG project. Woodside has apparently been in talks with Japanese conglomerates – Mitsubishi, Mitsui and Sumitomo – with regards to buying a stake in the project, and it will be interesting to see if they will be keener to grab the LNG opportunity, especially if there is a shift away from nuclear power in Japan.  

Rio Tinto, Riversdale Mining, Whitehaven Coal  

Rio Tinto's revised offer looks to have had some effect on Riversdale Mining's shareholders, with the mining giant gaining acceptances from 26.13 per cent of shareholders as of March 11, up from 17.86 per cent earlier. All of that is well and good for Rio but Tata Steel and CSN are still staying mum on how they want to proceed so the final outcome is still uncertain. Rio will no doubt be hoping that the Riversdale board's optimism that its major shareholders have been suitably placated by Rio's sweeteners is not misplaced. Meanwhile, Whitehaven Coal's shortlist of bidders now reportedly holds a heavyweight Indian suitor and it's one that many in Australia probably haven't heard much about. According to India's Business Standard newspaper, the $US29 billion Aditya Birla Group (ABG) is in the race for Whitehaven and is poised to make a formal bid for the miner. The Indian conglomerate is reportedly expected to make the offer through its unlisted group company Essel Mining & Industries Ltd and it does have a presence in Australia through copper miner Aditya Birla Minerals, which holds the Nifty mine in WA and the Mount Gordon project in Queensland. Reliance Power, owned by billionaire Anil Ambani, is reportedly the second Indian suitor in the mix, along with China's Yanzhou Coal.

Valad Property Group, Kresta Holdings

Valad Property Group is holding on to its European portfolio for the time being with the company ending talks with an interested consortium led by its chief executive Peter Hurley. Hurley, along with Valad's European chief executive Martyn McCarthy, had hatched a management buyout plan for the company's European business late last year, which has now been effectively binned. The plan valued the business at £52 million, a touch under its book value of £56.5 million. The focus has now turned to the immediate fate of Hurley and understandably Valad shareholders don't seem to be very fond of the man. According to The Sydney Morning Herald, Valad's largest shareholder, Orbis Funds, is leading the mob and has asked for the immediate resignation of Hurley. The sentiment has reportedly been echoed by Valad's founder and former managing director, Barry Wynne, who has urged decisive action to boot Hurley out. Moving to a separate but no less acrimonious boardroom situation, blind and curtain maker Kresta Holdings has kicked former chairman Ian Trahar off the board. Trahar's ousting is a win for major shareholder Hunter Hall Investment Management which has been waging a long running battle to show Trahar, who owns 19.6 per cent of Kresta, the door. The Perth-based businessman also launched a $46.9 million cash bid through his vehicle, Wildweb Enterprises, in a bid to derail Hunter Hall's plans. However, the bid has been subsequently labelled as insufficient by an independent expert report. With shareholders evidently turning their backs on Trahar we will have to wait and see if he is still willing to pursue Kresta.

Wrapping up

It's the day of reckoning for Alinta Energy as its shareholders get ready to vote on the TPG-led $2.1 recapitalisation plan for the power retailer and it will be interesting to see if dissident shareholders Coastal Capital and Bronte Capital will have enough traction to rock the boat. Alinta's 40 creditors are reportedly set to meet this morning to pass the resolutions to approve the debt-for-equity swap and while that should pass without a hitch there could be some fireworks at the extraordinary general meeting later in the day. Meanwhile, Virgin Blue has joined rival Qantas in hiking its fares and fuel surcharges. It is the second time in less than a month that the airline group, comprising Virgin Blue, Polynesian Blue, Pacific Blue and V Australia, has raised airfares to tackle higher fuel prices. Rising fuel prices are just one of the cost pressures weighing on airlines across the globe but Qantas and Virgin now have the added headache of a carbon tax. Keeping that in perspective, it was quite a surprise to hear Qantas boss Alan Joyce backing the Gillard government's carbon plan. Joyce has told the AFR that the move is an important step towards transitioning Australia away from coal-fired energy and non-sustainable fuels. Elsewhere, Future Fund boss David Murray is reportedly facing an uncertain future with his current term set to expire in three weeks. According to the AFR, the federal government is yet to decide if he will be reappointed amid speculation that many within Labor are angry at Murray's strident criticism of the mining tax and the national broadband plan. Finally, billionaire investor Warren Buffett has delivered on his promise of finding big name prey in his M&A hunt. Buffet's Berkshire Hathaway has struck a $US9 billion cash deal to buy lubricants maker Lubrizol Corp for $US9 billion to tap rising demand for chemicals used to operate engines and machinery. "Lubrizol is exactly the sort of company with which we love to partner," Buffett said in a statement.