BREAKFAST DEALS: QR National rolls out

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Australia's biggest IPO of the year, QR National, is off and running. Elsewhere, Alinta prays for a rescue deal. Plus, can Sinochem scupper BHP's Potash bid?

QR National

Queensland treasurer Andrew Fraser didn't waste a minute in getting the biggest float in Australia since the privatisation of Telstra off and running on Sunday, extolling investors to become "part of something big” when the government issues the IPO prospectus for its QR National business on October 10. Announcing the release date at the Brisbane Cricket Ground, Fraser was on the front foot telling all and sundry that the process of transforming a Queensland icon to one of Australia's top 50 companies – with an enterprise value of $7 billion including debt – will be a win for all Queenslanders. Fraser's pitch to retail investors held a further sweetener with retail share buyers given the opportunity to buy shares at a discount to the price paid by institutional investors, pay no brokerage fees and win loyalty bonus shares if they hang on to their shares for a specified period of time. Queenslanders can look forward to an extra incentive, given priority allocation in the share offer. Fraser and his boss Anna Bligh – who incidentally missed out on the bonhomie yesterday – have a lot riding on the IPO, which is the centrepiece of the government's $15 billion privatisation plan. With state debt spiralling out of control and public popularity at an all time low, Fraser will no doubt hope that the $15 million ad campaign and the posse of managers– Credit Suisse, Goldman Sachs, Merrill Lynch, RBS and UBS are acting as joint lead managers along with Commonwealth Securities and Wilson HTM working as co-lead managers – can drum up enough interest in the brand. Speaking of the advertising campaign, expect to see a lot of coal carriages of various sizes in various publications (Business Spectator included) until the float takes place later in the year.

Alinta

There's light at the end of the tunnel for Alinta Energy chief executive Ross Rolfe, who has had the thankless task of resuscitating the waning fortunes of the debt-laden power retailer with reports that a rescue deal was on its way. Hopes of a TPG led private equity bailout took a blow last week after news that the private equity giant was at loggerheads with a number of reticent hedge funds and lenders, however, The Australian reports that TPG has managed to placate some after agreeing to compromise on some key terms of the rescue package – which proposes a debt for equity swap and a deeply discounted $300 million capital raising, with 25 per cent guaranteed to TPG and partners Oaktree Capital and Anchorage Capital. According to the paper, TPG's decision to drop its claim for a priority placement as part of the capital raising has managed to appease some of Alinta's lenders, including BNP Paribas, Dexia, WestLB, Societe Generale and UniCredit Bank. TPG has had less luck getting the hedge funds onside, with Sankaty Advisers still holding out. There is another option, devised by investment bank Rothschild, on the table which doesn't include the $300 million capital raising and the market will be eager to see which way the penny drops once Alinta breaks its silence this week.

BHP Billiton, Sinochem, PotashCorp

BHP Billiton may have secured the funds it needs to fuel its $41 billion bid for Potash Corporation of Saskatchewan but speculation is growing that Sinochem Group is sharpening its knives to stymie any deal. The miner managed to cap off a $48 billion syndicated loan facility over the weekend amid reports that Sinochem had formally asked the government to back a bid for PotashCorp. With Sinochem needing anywhere between $50 to $60 billion to trump BHP, China's Economic Observer reports that the chemical conglomerate has lodged a formal request for government approval for a bid, urging the government to lend a helping hand. Beijing is taking a keen interest in the race for PotashCorp, but whether it can justify an intervention in the deal on the grounds of protecting food security remains to be seen.

Leighton Holdings, Grupo ACS, Hochtief

Market watchers expecting an Iberian takeover of Leighton Holdings can cool their heels, with Spain's Grupo ACS saying that it saw no need to lob a bid for the Australian construction giant. ACS grabbed the limelight late last week after pitching its zero-premium all-share takeover offer for Leighton's major shareholder Hochtief. The move sparked speculation that Leighton could be in ACS' sights but the Spanish company's general manager Angel Garcia Altozano has told the media that there were no plans for a bid and it was not legally obliged to make an offer if and when it takes control of Hochtief. For the time being, ACS will have its hand full with its "friendly” tilt at Hochtief, which the German company has labelled as patently "unfriendly.” Meanwhile, ACS has taken a 17 per cent stake in Perth-based engineering services provider Macmahon Holdings. Leighton has a 19 per cent stake in Macmahon and has been touted as a possible suitor for the company.

Wrapping up

Heavyweight brewer SABMiller has finally cleared the air over where it stands on Foster's beer unit, with chief Graham Mackay saying that a due diligence on the business had been undertaken. Mackay, who made the comments at the brewer's global leadership conference, told the Wall Street Journal that the impending demerger of Foster's businesses was on his radar. However, one should note that Mackay is pretty cautious on M&A so a full takeover pitch before the demerger may not be forthcoming. Online travel company Webjet has been identified as a possible takeover target, with a report in The Australian saying that analysts expect the company to come on the radar of Fairfax Media. With the media company on the lookout for acquisition, especially in the web space, Citi analysts reckon that Webjet just might fit the bill. Meanwhile, ANZ Banking Group is a step closer to making a decision on making a play for a majority stake in Korea Exchange Bank (KEB), with reports that the bank has completed its due diligence. After running its eye over the stake for three weeks a decision is expected by October, Korea's EDaily reports. Veteran timber man Tony Jack has returned with a bid to salvage two of the failed managed investment schemes of timber group Great Southern which were not picked up by Gunns when it took over nine of Great Southern's 11 schemes. Jack has told The Australian Financial Review that there was still enough value for growers to justify their resurrection. Elsewhere, Virgin Blue might be having some trouble getting its overseas strategy off the ground thanks to uncooperative regulators but the aviation sector is getting ready to welcome its biggest member, with shareholders of United Airlines and Continental Airlines backing their multibillion dollar merger. The combined entity, United, is forecast to book annual revenue of $32 billion. Finishing off with IPOs and Spain, expectations are rising that the Spanish lender Santander is set to spin off its UK arm in coming months. According to Reuters, the lender is likely to sell about 20 per cent of the business in 2011. With a stake sale of at least £3 billion ($US4.7 billion) on the cards, the move could arguably be the highest profile London flotation in a decade, Reuters reports.