BREAKFAST DEALS: Rio alliance

Rio Tinto and Ivanhoe Mines put forward a unified front as the miners refuse to renegotiate the existing Oyu Tolgoi agreement with the Mongolian government – and the rare show of solidarity from the miners could potentially get ugly. Meanwhile, Sundance Resources' decision to back Hanlong Mining's sweeter offer has its share of critics but the target's chairman, George Jones, reckons he got the mix just right and is now keen to play a part in the rescue of the $5.9 billion Oakajee port project. In other news, Qantas shares hit a record low as the airline's chief executive, Alan Joyce, finds himself on the receiving end of a death threat, the ATO's Myer quest takes a hit and Telstra shareholders are urged to vote 'yes' on the $11 billion NBN deal, although it's unlikely that they are in need of any more prompting.

Rio Tinto, Ivanhoe Mines, Oyu Tolgoi

Rio Tinto and Ivanhoe Mines may have had their fair share of argy bargy but the partners in the massive Oyu Tolgoi copper-gold project have put up a united front in resisting moves by the Mongolian government to push for a bigger stake in the project. The Mongolian government owns a 34 per cent stake in the project under an agreement signed with Ivanhoe in 2009, which also holds a provision allowing it to raise its stake to 50 per cent after 30 years. However, the Mongolian government has asked that the existing ownership structure of the $US10 billion project be renegotiated, a demand that has been flatly refused by Rio and Ivanhoe. The rare show of solidarity between the miners ratchets up the tension between them and Ulan Bator and what was initially seen as a bit of pre-election sabre rattling could now potentially become a contentious dispute. Ivanhoe said in a statement that the venture has also written to the individual members of Mongolia's National Security Council requesting the council's help in ensuring the government's "full support" for the 2009 investment agreement. The National Security Council of Mongolia includes the president, the speaker of the parliament and the prime minister. Apart from the billions at stake here – both for the miners and the Mongolian economy – the brewing dispute will also have an impact on the nation's reputation as the hottest mining destination around. A large number of global miners are keen to tap into Mongolia's resource wealth and cash in on its proximity to China. A potentially ugly fracas here could make mainstream miners think twice before putting their money into the country. There is a chance that Ulan Bator will decide to back down on its demands and honour the existing agreement but with the battle lines now drawn a lot of miners and investors will be keeping a close eye on the situation.

Sundance Resources, Hanlong, George Jones, Oakajee

Sundance Resources has unsurprisingly backed Hanlong Mining's 57 cents a share cash offer and the iron ore junior's chairman George Jones can take heart from the fact that he has managed to get a sweeter offer from the Chinese suitor to ensure that its Mbalam project stays on track. The decision has its critics and there is still a chance that the conditionality attached to the deal, which basically means that Hanlong is only going to come on board once Sundance gets the necessary approvals from the governments of Cameroon and Congo, could still derail the $1.7 billion deal. Jones said those approvals should be received in the next eight weeks but some investors and analysts aren't too thrilled that Hanlong will pick up Sundance only when all the regulatory risks attached are out of the picture. Still, this will be a victory of sorts for Jones, who only took charge at Sundance after a tragic accident in June claimed the miner's entire board. The industry veteran came out of retirement to take charge at Sundance and he reckons he has got a pretty decent price from Hanlong. With the deal almost sealed, Jones has already flagged that he is keen to pull off another rescue act, this time at the troubled Oakajee port development. Jones has told AAP that he intends to continue as the chairman of Gindalbie Metals, one of the miners attached to the project, and will do his best to help ensure Oakajee is built. Gindalbie has previously flagged the possibility of acquiring a small equity stake in the beleaguered $5.9 billion port development that is on the ropes after its developer Murchison Metals said it didn't have the money for the project and major customer Sinosteel mothballed its $2 billion Weld Range mine.

Qantas Airways

The industrial dispute between Qantas and the unions has taken a nasty turn, with reports that the airline's chief executive, Alan Joyce, has been on the receiving end of a rather brutish death threat and a number of other senior staff also reportedly copping abuse from the unions. Meanwhile, the flying kangaroo's stock has lost its hop, hitting an all-time low of $1.37 yesterday. Qantas' shares have slumped 46 per cent this year and investors are no doubt starting to wonder just how much the ongoing IR scuffle has cost the airline. Qantas suffered a $130 million hit in 2008 on the back of industrial action and The Australian Financial Review reports that there is speculation a similar hit may be in store this time around. Qantas' upcoming annual general meeting will no doubt prove to be an interesting affair and the paper said the airline may shed some light on the issue then. Meanwhile, with Qantas shares in the dumps one of its major shareholders has played down any chance of a takeover in the immediate future. Balanced Equity Management founder and managing director Andrew Sisson has told the AFR that not only does the Qantas Sale Act serve as a healthy deterrent to would-be suitors but most airlines in the region are tackling the same cyclical pressures that are hurting Qantas. There is some talk that a party could choose to move into Qantas' register and then push to break up the business with the spin-off of the Frequent Flyers and Jetstar business. That may be a valid scenario in theory but with Joyce commanding the respect and loyalty of existing investors it's not likely to gain much traction. For now the biggest headache for Joyce and Qantas' share price is the industrial dispute, which is evidently getting dirtier by the minute.

Myer, TPG, ATO

The Australian Tax Office's plans to recoup $739 million from two companies that pocketed profits from the float of Myer took a hefty hit yesterday even as the who's who of Australia's corporate and political world were waxing lyrical at the first day of the tax forum in Canberra. The ATO has been chasing two newly-created companies attached to private equity giant TPG – TPG Newbridge Myer and NB Queen SARL – for the last two years after TPG pocketed a $1.5 billion profit from the Myer float. Earlier this year, the ATO was advised that it could serve a demand for the $739 million owed in unpaid taxes and penalties to TPG Newbridge, NB Queen and TPG managing partner Ben Gray, who was the chief executive of TPG Australia at the time of the float. As it turns out the ruling handed out by the court in August was reversed yesterday on what the AFR reports as a technicality put forward by TPG's legal team, which was led by Alan Myers QC. According to the paper, Myers' argument was quite simply that the companies being chased by the ATO had no links to Australia and therefore do not fall under the jurisdiction of the 5.7 bodies under the Corporations Act. The court evidently bought that call and reversed its previous decision. TPG Newbridge is incorporated in the Cayman Islands, while NB Queen is based in Luxembourg.

Telstra, NBN, Institutional Shareholder Services

With less than two weeks to go before Telstra's annual shareholder meeting and no signs of any progress on getting approval from the Australian Competition and Consumer Commission on the $11 billion NBN deal, there are more signs that the deal is set to get overwhelming support from the telco's shareholders. Telstra's major shareholders have already indicated that they are ready to back the deal, and as mentioned earlier in this column there really is no reason for the shareholders to not support the existing deal given Telstra's promise of another vote if the ACCC forces material changes to the deal. Even a change at the top in Canberra will only benefit shareholders' interest. Taking that into account, it's easy to see why proxy adviser Institutional Shareholder Services has reportedly urged the telco's investors to vote 'yes' on the $11 billion deal, although it's unlikely that they are in need of any extra prompting.

Wrapping up

CP2-led consortium Horizon Road's $2.17 billion bid for ConnectEast has been waved through by the Supreme Court but the new owner of the toll road operator is reportedly having some difficulty in persuading shareholders to take a stake in a proposed EastLink Investment Fund, which was designed as an alternative to the 55 cents a share cash offer to ConnectEast investors. According to the Herald Sun, interest in the investment fund had been minimal in the five weeks since the offer opened, with less than three million units snapped up so far. Investors need to take up at least 78 million units and the offer closes next Monday. Meanwhile, the receivers of Burrup Fertilisers, PPB Advisory, must have realised that muck raking can be a two-way street now that Burrup founder Pankaj Oswal has reportedly accused PPB of "scandalous” spending since being appointed receiver. According to The Australian, Oswal's law firm, Murcia Pestall Hillard, hired accounting firm BDO to pore over PPB's general ledger for the six months to June 30. BDO's investigation has reportedly revealed that PPB collected $5.1 million in fees, spent $50,000 buying iPads and racked up travel and accommodation bills worth hundreds of thousands of dollars in just five months. In other news, former Newcrest Mining boss Ian Smith is reportedly in the running to take a seat at Transurban's board and UBS is set to get the ball rolling on the first stage of the float of 35 per cent of Fairfax Media's New Zealand online auctions business Trade Me.