BREAKFAST DEALS: Rio-Alcoa revisited
Rumours of a Rio Tinto bid for Alcoa resurface.
Talk of a Rio Tinto offer for Alcoa has popped up again, with rumours of a large loan being taken out to finance the bid. Elsewhere, the battle for Burrup Fertilisers is starting to take shape, with Chinese giant Sinofert emerging as a contender, while the fight for Queensland's Abbot Point is over, with India's Adani taking the spoils.
Rio Tinto, Alcoa
Rumours of an impending bid for Alcoa from miner Rio Tinto saw a flurry of action around the US aluminium giant on Wall Street overnight. An unnamed trader told Reuters of talk in market circles that Rio has taken out a $US25 billion syndicated loan to finance the offer. Analysts played down the talk, with similar rumours having come and gone in the past. Morningstar analyst Bridget Freas said such a move would be inconsistent with Rio's recent thinking. "I don't think aluminium is something Rio wants to double down with now after they purchased Alcan a few years back and probably regret it," she told Reuters. Both Satander and JPMorgan have denied involvement in any funding efforts.
Burrup, Sinofert, Incitec
Competition for collapsed fertiliser maker Burrup is beginning to heat up, with The Australian reporting that Chinese state-owned Sinofert has added its name to the growing list of suitors for the group. Sinofert, a subsidiary of Chinese giant Sinochem, is said to be keen to gain a presence in Australia after its failed bid for Nufarm in 2009. Explosives maker Orica confirmed earlier this week it has submitted an expression of interest in Burrup, while Wesfarmers and Norweigan group Yara International are also reportedly keen. Meanwhile, the ACCC has wasted no time dwelling on Rod Sims' appointment as the replacement for departing chairman Graeme Samuel, launching into a review of a potential move by Incitec Pivot on Burrup. Formal bidding for the group could begin within weeks, when an information memorandum is sent out to interested parties. Burrup, which owns Australia's biggest ammonia plant in WA, was placed in the hands of receivers PPB Advisory by major creditor ANZ in December. A legal dispute over supply contracts threatens to derail any potential sale, with Burrup to face Apache and Kufpec in court in August.
Abbot Point, Adani, Tinkler
Nathan Tinkler has failed in his late bid to secure control of the Abbot Point coal terminal from the Queensland government, after the project was awarded to India's Adani Enterprises. Adani secured a 99-year lease on the site with a $1.82 billion offer, which was reportedly $50 to $100 million less than a tilt from Tinkler that came after the deadline for all bids. The size of the final offer is a boost for Queensland, which was expecting a price of around $1.5 billion for the asset. Queensland finance minister Rachel Nolan told The Australian that if the government had sided with the Tinkler offer, it would have been forced to re-open the tender. The sale marks the end of the Bligh government's asset privatisation program, which also saw the float of infrastructure firm QR National.
BHP, Olympic Dam
BHP Billiton has ruled out a joint venture to help fund the mining giant's flagship Olympic Dam project, assuring The Australian Financial Review that the group is in the business to dig mines, not sell them. BHP chief Marius Kloppers said the miner viewed an ideal partner as someone who brought skills to a project that complemented the group's own. "In our backyard, we believe we have all of the skill sets and the capital,” he told the paper. Kloppers said South America and Africa were locations where BHP was likely to pursue that kind of relationship with other firms.
CGNP, Kalahari, Extract
Extract Resources has suffered a blow after a request from major shareholder Kalahari Minerals and suitor China Guangdong Nuclear Power to lower the latter's takeover bid has been rejected by British regulators. Both firms have agreed to a 7 per cent cut to the deal, but the British Takeovers Panel has knocked it back. Kalahari has said it will appeal the decision. The bid has suffered from a low appetite for nuclear energy in the wake of the Japanese earthquake disaster, as well as moves from the Namibian government to overhaul the ownership of mining operations in the country. Extract owns the Husab uranium project in the African nation, the main attraction for CGNP in the deal.
ING, ING Direct
Dutch financial giant ING is considering selling its local online banking unit ING Direct, sources have told Bloomberg, with Standard Charted being sounded out as a possible suitor. ING may also look to sell part of its Asian commercial banking operations, as the group attempts to repay some of the €10 billion loaned to it by the Netherlands government during the financial crisis. Analysts told Bloomberg that the big four Australian banks were unlikely to play a role in any bidding.
Glencore, Aabar Investments
Sources have told Reuters that Abu Dhabi group Aabar Investments will be the largest backer of commodities giant Glencore's $12 billion float. Others supporting the initial public offering will be Swiss banks Credit Suisse, Pictet and UBS, hedge funds Och-Ziff Capital Management and Eton Park, as well as existing Glencore convertible bond investors. A prospectus and initial price range on the float is due later this week.
Wrapping up
Telstra has appointed a former chief executive of Chinese group Orange Sky Entertainment as head of its operations in China, leading to speculation the telco may look at media and entertainment assets in the country. Still in telecommunications, talks between NBN Co and internet service providers over pricing details of the developing national broadband network have hit a snag, according to The Australian Financial Review. The ISPs believe the current pricing structure will force smaller players out of the market, while NBN Co says any changes could threaten its return on investment. In the media sector, Fairfax may look to offload a 50 per cent stake in New Zealand auction website Trade Me through an initial public offering, according to The Australian. Fairfax, which earlier this week flagged falling profits and a staff restructure, may also look to sell its radio operations as it attempts to steady the ship. Meanwhile, TVN may consider pushing for a joint venture with Tabcorp for control of Sky Channel if it cannot secure a controlling stake outright, The Australian Financial Review reports. Talks between the groups on a similar deal collapsed last year. In aviation, Virgin Blue is set to relaunch as Virgin Australia today, as part of the unveiling of its two new duel-class Boeing 737s. The Australian reports that both John Borghetti and Richard Branson will be on hand at the unveiling in Sydney today. Elsewhere, Japanese group Nipro Corporation has made a bid for Amcor's glass tubing arm, leading the packaging firm to enter consultation on the $166 million offer. In property, Australand has acquired the Ashlar Golf Course in Sydney as the site for a future residential community. In markets news, the federal government is expected to approve Chi-X's application to run a rival Australian exchange to ASX as early as this week, according to The Australian Financial Review. Overseas, Deutsche Boerse is under pressure to increase its $US10.2 billion offer for NYSE Euronext, after Nasdaq OMX Group and IntercontinentalExchange announced, as expected, that they would be going hostile with their $US11 billion bid. Back in Australia, Archer Capital and Asian sports marketer World Sports Group have lodged bids for a controlling interest in V8 Supercars Australia, according to The Australian. Both firms are thought to have bid above $300 million for the stake, which was more than the market had expected. In tech news, Twitter has made a $50 million bid for third-party software supplier TweetDeck, and a successful offer would see the social network complete its largest ever acquisition. Elsewhere, Chinese social network Renren is seeking to raise up to $743.3 million in a US initial public offering, according to Bloomberg, which would value it at more than twice the valuation of US giant Facebook. Finally, Teva Pharmaceutical Industries has won its takeover battle with Canada's Valeant Pharmaceuticals, striking a $US7 billion deal to acquire US drugmaker Cephalon.
Rio Tinto, Alcoa
Rumours of an impending bid for Alcoa from miner Rio Tinto saw a flurry of action around the US aluminium giant on Wall Street overnight. An unnamed trader told Reuters of talk in market circles that Rio has taken out a $US25 billion syndicated loan to finance the offer. Analysts played down the talk, with similar rumours having come and gone in the past. Morningstar analyst Bridget Freas said such a move would be inconsistent with Rio's recent thinking. "I don't think aluminium is something Rio wants to double down with now after they purchased Alcan a few years back and probably regret it," she told Reuters. Both Satander and JPMorgan have denied involvement in any funding efforts.
Burrup, Sinofert, Incitec
Competition for collapsed fertiliser maker Burrup is beginning to heat up, with The Australian reporting that Chinese state-owned Sinofert has added its name to the growing list of suitors for the group. Sinofert, a subsidiary of Chinese giant Sinochem, is said to be keen to gain a presence in Australia after its failed bid for Nufarm in 2009. Explosives maker Orica confirmed earlier this week it has submitted an expression of interest in Burrup, while Wesfarmers and Norweigan group Yara International are also reportedly keen. Meanwhile, the ACCC has wasted no time dwelling on Rod Sims' appointment as the replacement for departing chairman Graeme Samuel, launching into a review of a potential move by Incitec Pivot on Burrup. Formal bidding for the group could begin within weeks, when an information memorandum is sent out to interested parties. Burrup, which owns Australia's biggest ammonia plant in WA, was placed in the hands of receivers PPB Advisory by major creditor ANZ in December. A legal dispute over supply contracts threatens to derail any potential sale, with Burrup to face Apache and Kufpec in court in August.
Abbot Point, Adani, Tinkler
Nathan Tinkler has failed in his late bid to secure control of the Abbot Point coal terminal from the Queensland government, after the project was awarded to India's Adani Enterprises. Adani secured a 99-year lease on the site with a $1.82 billion offer, which was reportedly $50 to $100 million less than a tilt from Tinkler that came after the deadline for all bids. The size of the final offer is a boost for Queensland, which was expecting a price of around $1.5 billion for the asset. Queensland finance minister Rachel Nolan told The Australian that if the government had sided with the Tinkler offer, it would have been forced to re-open the tender. The sale marks the end of the Bligh government's asset privatisation program, which also saw the float of infrastructure firm QR National.
BHP, Olympic Dam
BHP Billiton has ruled out a joint venture to help fund the mining giant's flagship Olympic Dam project, assuring The Australian Financial Review that the group is in the business to dig mines, not sell them. BHP chief Marius Kloppers said the miner viewed an ideal partner as someone who brought skills to a project that complemented the group's own. "In our backyard, we believe we have all of the skill sets and the capital,” he told the paper. Kloppers said South America and Africa were locations where BHP was likely to pursue that kind of relationship with other firms.
CGNP, Kalahari, Extract
Extract Resources has suffered a blow after a request from major shareholder Kalahari Minerals and suitor China Guangdong Nuclear Power to lower the latter's takeover bid has been rejected by British regulators. Both firms have agreed to a 7 per cent cut to the deal, but the British Takeovers Panel has knocked it back. Kalahari has said it will appeal the decision. The bid has suffered from a low appetite for nuclear energy in the wake of the Japanese earthquake disaster, as well as moves from the Namibian government to overhaul the ownership of mining operations in the country. Extract owns the Husab uranium project in the African nation, the main attraction for CGNP in the deal.
ING, ING Direct
Dutch financial giant ING is considering selling its local online banking unit ING Direct, sources have told Bloomberg, with Standard Charted being sounded out as a possible suitor. ING may also look to sell part of its Asian commercial banking operations, as the group attempts to repay some of the €10 billion loaned to it by the Netherlands government during the financial crisis. Analysts told Bloomberg that the big four Australian banks were unlikely to play a role in any bidding.
Glencore, Aabar Investments
Sources have told Reuters that Abu Dhabi group Aabar Investments will be the largest backer of commodities giant Glencore's $12 billion float. Others supporting the initial public offering will be Swiss banks Credit Suisse, Pictet and UBS, hedge funds Och-Ziff Capital Management and Eton Park, as well as existing Glencore convertible bond investors. A prospectus and initial price range on the float is due later this week.
Wrapping up
Telstra has appointed a former chief executive of Chinese group Orange Sky Entertainment as head of its operations in China, leading to speculation the telco may look at media and entertainment assets in the country. Still in telecommunications, talks between NBN Co and internet service providers over pricing details of the developing national broadband network have hit a snag, according to The Australian Financial Review. The ISPs believe the current pricing structure will force smaller players out of the market, while NBN Co says any changes could threaten its return on investment. In the media sector, Fairfax may look to offload a 50 per cent stake in New Zealand auction website Trade Me through an initial public offering, according to The Australian. Fairfax, which earlier this week flagged falling profits and a staff restructure, may also look to sell its radio operations as it attempts to steady the ship. Meanwhile, TVN may consider pushing for a joint venture with Tabcorp for control of Sky Channel if it cannot secure a controlling stake outright, The Australian Financial Review reports. Talks between the groups on a similar deal collapsed last year. In aviation, Virgin Blue is set to relaunch as Virgin Australia today, as part of the unveiling of its two new duel-class Boeing 737s. The Australian reports that both John Borghetti and Richard Branson will be on hand at the unveiling in Sydney today. Elsewhere, Japanese group Nipro Corporation has made a bid for Amcor's glass tubing arm, leading the packaging firm to enter consultation on the $166 million offer. In property, Australand has acquired the Ashlar Golf Course in Sydney as the site for a future residential community. In markets news, the federal government is expected to approve Chi-X's application to run a rival Australian exchange to ASX as early as this week, according to The Australian Financial Review. Overseas, Deutsche Boerse is under pressure to increase its $US10.2 billion offer for NYSE Euronext, after Nasdaq OMX Group and IntercontinentalExchange announced, as expected, that they would be going hostile with their $US11 billion bid. Back in Australia, Archer Capital and Asian sports marketer World Sports Group have lodged bids for a controlling interest in V8 Supercars Australia, according to The Australian. Both firms are thought to have bid above $300 million for the stake, which was more than the market had expected. In tech news, Twitter has made a $50 million bid for third-party software supplier TweetDeck, and a successful offer would see the social network complete its largest ever acquisition. Elsewhere, Chinese social network Renren is seeking to raise up to $743.3 million in a US initial public offering, according to Bloomberg, which would value it at more than twice the valuation of US giant Facebook. Finally, Teva Pharmaceutical Industries has won its takeover battle with Canada's Valeant Pharmaceuticals, striking a $US7 billion deal to acquire US drugmaker Cephalon.
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