BREAKFAST DEALS: Rio pay day

Rio Tinto's remuneration policy comes under fire again with a major shareholder accusing the mining giant of being too generous when it comes to rewarding top executives. A Hong Kong listing for Fortescue Metals looks well and truly on the cards as the miner revives talk of a move into the coal sector. Meanwhile, Denmark's Carlsberg is tipped as a potential suitor for Foster's beer business and some Lynas Corporation's shareholders threaten legal action over the rare earth miner's deal with Forge Resources. Elsewhere, GrainCorp could be the next big local agribusiness target, Foxtel looks set to score big in the latest round of AFL talks and Boral may make tilt for west coast building king Len Buckridge's BCG business.

Rio Tinto

Rio Tinto's remuneration policy is under fire once again with the mining giant's fifth-largest shareholder reportedly calling for a full overhaul. The issue of exorbitant remuneration for top Rio executives also reared its head last year when almost 41 per cent of shareholders failed to support the miner's remuneration report and UK's Sunday Times reports that fund manager Standard Life Investments, which owns a 1.9 per cent stake in Rio, has criticised the miner for rewarding its top executives for reaching "unchallenging” targets. Rio chief executive Tom Albanese's pay packet rose 31.4 per cent to $8.98 million in 2010, compared to the $6.7 million he took home the year before and Albanese wasn't the only one getting a bigger pay check. CFO Guy Elliot and iron ore chief Sam Walsh both received a boost, with Elliot's packet growing 29.4 per cent to $5.9 million while Walsh's rose 24.4 per cent to $7.5 million. Standard Life, presumably angry about this sort of largesse, has urged for a radical change to the rules governing long-term share incentives, telling the paper that the current set-up handed executives generous remuneration for achieving unchallenging performance conditions.

Fortescue Metals

Meanwhile, it looks like Andrew Forrest's Fortescue Metals is planning to list its magnetite assets in Hong Kong by the end of this year. Forrest has been hinting the move for the last couple of weeks and Fortescue's COO Neville Power has now reportedly confirmed the plan at  the Boao Economic Forum in southern China. According to Reuters, Power has also flagged a possible sale of the magnetite assets to interested parties. Interestingly, Power has also revived talk that it is serious about branching into another bulk commodity – coal – and is looking for acquisitions. The miner first flagged its coal aspirations in August last year when its confirmed that it was looking to hire a specialist coal geologist and has since bought a number of explorations permit tenures in Queensland. It also recently missed out on grabbing a piece of the massive Mongolian coal project Tavan Tolgoi.

Foster's Group, Tabcorp

With local brewery giant Foster's Group's demerger firmly on track for April 29, it's hardly surprising that takeover speculation is starting to pick up as the day closer. So far global heavyweight SAB Miller is seen as the one most likely to make a move but there is also talk that Carlsberg may be willing to have a go. The speculation came after the Danish brewer's chairman, Poyl Krogsgard, told Reuters that growth in the Asia-Pacific region is firmly on his agenda and he had the financial muscle to pursue opportunities. Krogsgard said that the company could easily raise between $7.8 billion to $9.65 billion. However, that may still leave it short of cash given that the beer is tentatively worth around $10 billion dollars. An eventual offer will undoubtedly be need to be higher, around the $12 billion to $13 billion mark. Speaking of demergers, independent expert Grant Samuel has told Tabcorp shareholders that the $5.2 billion split of the company's gaming and casino units is in their best interest. According to the expert's report, the move will benefit both businesses and also improve their prospects of receiving takeover offers from interested parties. Tabcorp shareholders will vote on the proposed demerger on June 1.

Lynas Corporation

Rare earth miner Lynas Corporation's plan to offload its non-core assets to Forge Resources through a related party transaction has reportedly ticked off some of its shareholders who have raised conflict of interest concerns. According to Fairfax papers, Lynas shareholders Surpion Pty Ltd, Aliana Pty Ltd and Daleford Way Pty Ltd have alleged that Lynas had provided them with misleading information pertaining to the deal. The main bone of contention for the disgruntled shareholders is the fact that Lynas' executive chairman, Nicholas Curtis, is also a director and 15 per cent shareholder of Forge. That means that Curtis stands to gain almost $30 million when he vests his performance shares in Forge once the deal, which could see Lynas' shareholders emerge with 15 per cent of Forge, is completed. Surpion, Aliana and Daleford Way allege that Curtis' befits were not spelled out clearly to them and given the extent of Curtis' stake in Forge the valuation of the deal might be a bit suspect.    

Graincorp, SunRice, Allan Myers QC

Moving to the agribusiness sector, the steady stream of acquisitive suitors into the space has sparked talk that GrainCorp may be on the radar of foreign predators. According to the Australian Financial Review, an offshore buyer has recently opened channels with investment banks to get the ball rolling on a potential bid for GrainCorp. Interestingly, GrainCorp isn't only seen as a prey but also considered a potential predator. It unsuccessfully tried to nab AWB last year and is still widely seen as the most likely buyer for animal feed and salt producer Ridley. Meanwhile, the shareholders of SunRice Australia are reportedly still divided in their response to the $610 million offer lobbed by Spain's Ebro. While some are sanguine that the offer is too good to refuse there are many out there who reckon that Ebro should pay more, especially as Australia gets ready to welcome a bumper rice harvest. With harvest estimated at around 800,000 tonnes, that's four times the amount hauled in the year before. Finally, Australia's richest barrister, Allan Myers, has reportedly agreed to bury the hatchet with two former managers of his Tipperary cattle station in the Northern Territory. Myers had been locked in a bitter dispute with former managers Rodney Illingworth and John Vereker, who were both sacked in 2007, but The Australian reports that the case has been settled out of court. According to the paper, the dispute concerned the valuation of 10 per cent Tipperary stakes – held by Illingworth and Vereker – for resale to Myers, who owned the other 80 per cent. The two men reportedly wanted an independent valuer to put a price on their holdings, and argued that Tipperary's June 2007 accounts, which showed $140 million in net assets, should set the benchmark. However, Myers launched a 45 million counter-claim of his own claiming that Tipperary had been mismanaged and was "unsellable".

Wrapping up

The battle for AFL broadcast rights is reportedly closer to a resolution, with a deal expected before Easter. According to Fairfax papers, Seven has apparently agreed to share Friday night football with Foxtel for the next five years. Seven and Ten have reportedly lobbed a joint bid of more than $400 million for rights for four AFL games a week and to share the finals. Foxtel has reportedly offered about $500 million and may end up showing all nine home-and-away games live from 2012. Channel Nine is reportedly putting in its final bid today but whatever the final outcome of the talks, its Foxtel that looks set to take the flags come 2012. Woolworths' third quarter sales numbers, due out today, are expected to be a tad weaker than expected and after the severe tongue lashing received by Macquarie analysts the grocery giant can at least look forward to some good news with regards to its $340 million bid for Cellarmasters. According to the AFR, the transaction has received the blessing of the Australian Competition and Consumer Commission. Meanwhile, Leighton Holdings is apparently set to shed some light on the factors behind its recent profit downgrade after receiving a clarification note from the ASX. Elsewhere, building materials supplier Boral has moved to increase its exposure to the Queensland mining and resources sector with the $173 million acquisition of concrete and quarry operations in the state from privately-owned Wagners Group. Boral boss Mark Selway has also flagged further moves in West Australia and the AFR reckons that that could see a potential move on construction, transportation and property investment group BCG, which is owned by the king of  west coast house building sector, Len Buckeridge. In international news, there's more action in the healthcare space with Johnson and Johnson reportedly in talks to buy Swiss medical device maker Synthes. According to Reuters, J&J is willing to pay up to $20 billion for the target in its attempt to further diversify its reach in the sector. Meanwhile, Lloyds Banking Group has reportedly taken another step in dismantling its empire, with the lender set to sell its majority stake in up-market financial services group St James's Place. According to UK's Sunday Express newspaper, the asset is valued at an estimated one billion pounds and is considered to be a non-core asset by Lloyds' new boss Antonio Horta-Osorio.