APN News and Media’s new chief gets some acquisitions advice, while Fortescue’s port and rail sale is on track.

APN News & Media investors weren't the only ones cheering the appointment – finally – of a new chief executive. There are already hints deal-hungry media companies might soon get a chance at some major APN assets. Elsewhere, Fortescue expects to have a new rail and port partner very soon, while Ridley Corp has picked up a mysterious new major shareholder. And is Slater and Gordon looking at assets in the UK?

APN News and Media, Allan Gray Australia

Not one day into the job and APN News and Media's new chief Michael Miller is already being schooled about asset sales.

The long-time News Limited executive was appointed at APN on Monday, two months after the company's previous boss, Brett Chenoweth, was ousted in a shareholder revolt over a planned capital raising. The coup, orchestrated by Allan Gray Australia and Dublin-based Independent News and Media, had left the headless company at an effective standstill.

Allan Gray chief Simon Marais, who owns 20 per cent of APN, is now encouraging the company to cut costs and consider asset sales — but only at the right price.

Speaking to The Australian, Marais singled out APN's publishing, digital, radio and outdoor advertising businesses.

"If they can get a price, they should look at them, but I don't think they should feel compelled to do it because the good thing about this business is that it does generate lots of cash," he said.

"Wait until the cycle returns and they're in a better position; sooner or later someone is going to want one of the assets, and then sell it. The worst thing you can do as a management team and board is be pressured into selling assets."

Considering what happened last time Allan Gray disagreed with APN management, Miller will undoubtedly be listening closely to what Marais has to say.

His comments will also be ringing in the ears of Peter Cosgrove, after the APN chairman last week flagged the sale of a number of joint ventures in an effort to simplify the company.

Atlas Iron, Fortescue Metals Group

Fortescue Metals Group's partial sale of its rail and port assets seems to be on track, with chief Nev Power confirming a deal is likely to be done by mid-year.

Power wouldn't be drawn on names, but he did note the company's shortlist of potential buyers includes sovereign wealth funds, infrastructure funds and industry players.

Rumour has it that Atlas Iron is currently Fortescue's preferred bidder for a minority share of its heavy rail and port facilities in the Pilbara, valued at about $3 billion. 

One complicating factor could be Atlas' involvement in an Aurizon study into a separate rail line for smaller iron ore operators in the region. Expect to hear more about that when the second phase of the study is handed down on July 1.

Proceeds from any infrastructure sale by Fortescue are expected to go towards strengthening its balance sheet, after the miner's $5 billion foray into US debt markets last year.

Guinness Peat Group, Ridley Corp

Ridley Corp is excited at the prospect of adding a supportive new shareholder to its register, after long-term investor Guinness Peat Group on-sold its 19.5 per cent holding in the stock feed and rendering company.

GPG announced the $54 million sale – worth about 90 cents a share, or a 14.6 per cent premium to Ridley's closing price on Friday – in a short note to the exchange yesterday.

While the buyer is yet to be confirmed, Ridley believes it is US private equity firm AGR Partners.

Ridley managing director John Murray told The Australian AGR representatives had visited the local company over the past year, expressing interest in its links to Asia, North Africa, the Middle East and South America.

"They have suggested to us that if we need to raise capital they will support that, so I am sure that they will be a supportive shareholder," Murray said.

It's unclear whether AGR will seek a seat at the board.

Slater and Gordon, SFG Australia, WHK Group

Listed law firm Slater and Gordon is apparently also hunting for acquisitions, after entering a trading halt pending an announcement about a capital raising.

The Australian Financial Review understands the raising will help fund a UK acquisition and is likely to be worth up to $65 million. An announcement about the planned purchase could come as early as this morning.

Meanwhile, SFG Australia and WHK Group are also in trading halts while they prepare to update the market on their proposed merger.

Talks between the two firms suffered a setback late last month, when WHK issued a profit warning that is expected to lower the terms of the scrip deal. As the offer currently stands, SFG investors would receive 0.503 WHK shares for each SFG share.

Wrapping up

Dexus Property Group has paid $434.8 million for Leighton Holdings' Kings Square office development in Perth, taking the total value of its latest shopping spree to close to $1 billion.

The debt-funded Kings Square buy was sealed a little over a week after Dexus bought Grocon's 480 Queen Street office tower, in Brisbane, for $543.9 million.

Elsewhere, Melbourne-based Nexvet, which converts drugs for humans into treatments for animals, is said to be raising funds ahead of a potential IPO next year.

Nexvet is seeking $6 million to fund research and to bring new products to market, according to an investor presentation obtained by The Wall Street Journal. The biotech is also said to have tapped Mandie Consulting as a financial advisor in anticipation of a 2014 listing on the Australian Securities Exchange.

And finally, Geoff Dixon is reportedly stuck with a giant parcel of shares in his son's company, Facilitate Digital, after the former Qantas chief underwrote a rights issue that fell well short of expectations.

Fairfax says Dixon Ssnr, who is a Facilitate board member, is on the hook for $1.5 million to pay for his new 30 per cent stake.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles