BREAKFAST DEALS: Resources ruckus

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Nyrstar's CBH Resources dream could be over. Plus, ANZ is set to offload a foreign asset.

CBH Resources, Nyrstar, Toho Zinc, Perilya

Is Nyrstar's CBH Resources dream over? The Belgian zinc giant says it is reviewing its options, after Japan's Toho Zinc made a 25 cent per share offer for the Australian base metals group, bettering its sweetened 19.5 cent per share bid. Nyrstar's legal and external affairs director Michael Morley has told Bloomberg CBH remains an interesting asset, just not at "any price”. Meanwhile, Toho – which is CBH's biggest shareholder at 24 per cent and owner of more than 50 per cent of its convertible notes – says Nyrstar's offer will not get up. It has now scrapped a placement of 50 million shares priced at 20 cents each, and capped its offer at 49.9 per cent of the target. This year's bidding war caps off a couple of turbulent years for CBH, with merger and takeover talks with neighbouring Perilya falling over and plummeting zinc prices at one stage weighing heavily on the stock.

Arrow Energy, Royal Dutch Shell, PetroChina, Liquefied Natural Gas, MEO Australia

Liquefied Natural Gas and Arrow Energy have extended a heads of agreement which grants the latter full control of the Fisherman's Landing liquefied natural gas project in Gladstone, but the agreement is no longer exclusive. This follows a joint takeover approach from Royal Dutch Shell and PetroChina for Arrow, with The Age reporting a Goldman Sachs JBWere view that the change might suggest the target is happy with how talks are proceeding. (If that is the case, calls for a higher bid might bear fruit). While Arrow continues "active” talks with its suitors, LNG has told Business Spectator there has been renewed interest in the coal seam gas sector over the past 18 months, and it will revisit the "range of companies large and small” with whom it has had chats in the past. Elsewhere in the sector, and attention has now turned to MEO Australia, or more specifically, who it will choose as its partner for its Artemis field, which is located close to Woodside's Pluto field and Chevron's Wheatstone project. According to The Australian, MEO is tipped to name PetroBras, with the Brazilian giant expected to take a 50 per cent stake in the project and fund further exploration. Another international firm named by The Australian Financial Review is Statoil of Norway.

ANZ Banking Group, National Australia Bank, Bank of Queensland

Across to banking, and ANZ Banking Group is set to do something unusual: offload a foreign asset. Having joined groups including HSBC Holdings and Standard Chartered in establishing and operating a fully-owned Vietnamese business, the Asia-focused bank is looking to sell its 10 per cent stake in the country's Sacombank, with an official telling Dow Jones a sale would prevent a possible conflict of interest. But a sale won't bring in the big bucks; its stake is said by Reuters to be worth less than $90 million, albeit a hefty increase from its 2005 purchase price. Elsewhere, and National Australia Bank told the market yesterday the US and UK economies remained fragile but had stabilised recently, while the Bank of Queensland has been named by the Fin as a potential bidder for the Australian operations of US vendor finance group CIT, alongside Commonwealth Bank of Australia and Macquarie Group. The regional lender has been rumoured to be mulling some sort of 'big bang' acquisition before the retirement of long-serving chief David Liddy, notwithstanding caution from the ACCC's Graeme Samuel on further contraction in the Australian banking industry.

Seven Network, WesTrac

A shareholder vote on the controversial Seven Network/WesTrac merger is a step closer following yesterday's court ruling, so eyes are now on institutional shareholders Ausbil Dexia and Perennial to see whether they will give the related party transaction the thumbs up. And amid speculation about what the merger might mean for Seven Media Group, the joint venture between Seven Network and private equity firm Kohlberg Kravis Roberts, comes another train of thought: according to the Sydney Morning Herald, both KKR and Seven are free to appoint an investment bank at any stage to advise on IPO or trade sale options, meaning Seven might be called to deal with the issue of Seven Media's substantial debt load at a time of KKR's choosing and possibly called to tip in millions of fresh equity in order to retain its 47 per cent stake. While Seven Network is currently cashed up, the proposed merger would see WesTrac's debt addressed by the listed entity – perhaps proving more difficult for Seven when it comes to pick up the Seven Media tab.

Wrapping up

The breaking of hostility between Rio Tinto and Chinalco continues, with Rio chairman Jan du Plessis saying he "deeply regretted” the miner's choice to dump a $US19.5 billion deal with the Chinese aluminium giant in favour of a giant rights issue and iron ore JV with BHP Billiton, saying Rio had lost a "unique opportunity to establish a strategic partnership that would have fundamentally changed” its relationship with its biggest customer base. Elsewhere, and gold miner Lihir Gold is getting closer to finding a new chief executive, says the AFR, amid talks it might attract takeover interest from rival Newcrest Mining. Lihir, which just sold its disappointing Ballarat asset, has also been linked to international firms Barrick and Newmont Mining. And the chief of Tasmanian timber group Gunns has reportedly confirmed that institutional investors have been asking him and directors Robin Gray and Richard Millar to resign, following a disastrous earnings season and agitation over the future of a proposed pulp mill in Tasmania's Tamar Valley.