Breakfast Deals: Seek and sell

James Packer's tipped to pay down private debt with two recent sales, while the shortlist of potential Lloyds buyers narrows to three.

James Packer has done a pair of sales, one of which is with SEEK, to raise $261 million that’s expected to go to paying down his private debt. Meanwhile, Westpac and ANZ Bank are on the shortlist for Lloyds Australian sale, APA Group isn’t budging on its Envestra offer unless it gets access to the books and Billabong International has been told by the Takeovers Panel ‘not on those terms’.

Crown, SEEK, Magellan Financial Group

Crown billionaire James Packer is expected to use the $261 million windfall from the sale of his stakes in SEEK and Magellan Financial Group to pay down his private debts.

Packer has offloaded his 4 per cent stake in online advertising juggernaut SEEK for $125 million. The move doesn’t quite end his long association with the company with the gaming billionaire maintaining a stake in SEEK’s Chinese arm Zhaopin. But that business is being prepared for a float for some time in the next 18 months.

Packer actually sold down his stake in 2009, but then built a smaller holding back up again.

Meanwhile, Packer’s private company Cavalane Holdings has also offloaded an 8.3 per cent stake in Magellan Financial Group for $136 million.

Lloyds Banking Group, Westpac Banking Corporation, ANZ Banking Group, Macquarie Group

Westpac Banking Corporation and ANZ Banking Group have reportedly emerged on the short list for Lloyds Banking Group’s Australian finance and commercial lending businesses.

According to The Australian, people familiar with the situation say that investment bank Macquarie Group is also on the short list.

Commonwealth Bank of Australia did express some interest, but never really seemed to be committed to the idea. Now it appears that National Australia Bank is also out of the running.

APA Group, Envestra

Pipeline company APA Group has made it clear that if Envestra wants a more generous offer it’ll have to open up its books.

APA is offering 0.1678 shares for every Envestra share in the rack and onlooking analysts are broadly in agreement that the target can afford to jostle for a little more.

“We can’t advance anything…without due diligence,” APA managing director Mick McCormack said yesterday. “Until we get access to due diligence, we’re not going anywhere.”

APA owns 33 per cent of Envestra, so it has a commanding position over the future ownership of the company, whether it ends up joined with APA or somewhere else.

The Australian Competition and Consumer Commission has opened up informal investigations into the proposed tie-up between the two and the independent directors of Envestra have told APA that 0.1678 shares ain’t enough.

Billabong International, Altamont Capital Partners, Centerbridge Partners, Oaktree Capital

Business Spectator’s Stephen Bartholomeusz has a ripper piece on the latest news on Billabong International and the Takeovers Panel, so we’ll try to keep it short and sweet here.

The Panel ultimately ruled that it had a problem with a few elements of the $US294 million ($326 million) recapitalisation plan from Altamont Capital Partners, particularly the enormous 20 per cent break-fee. They asked the pair to revise the agreement, which they have done and details can be found in Bartholomeusz’s piece.

While the panel deemed Altamont’s proposal ‘unacceptable’ it should be stated that the behaviour of Centerbridge Partners and Oaktree Capital, the two US investors that raised concerns about the Altamont deal, is worthy of the title ‘acceptable’.

The pair snapped up Billabong debt in the last dying moments before the Altamont deal was agreed to and then cried foul at some of the conditions.

After constant claims that they tried their darndest to get Billabong to listen to their incomplete and unacceptable proposal, Centerbridge and Oaktree now have a few weeks to put a proposal forward that’s actually worth all these delays.

Rio Tinto, Ivanhoe Australia, Inova Resources

Two well-to-do Chinese brothers have begun a $160 million cash bid for Inova Resources, the Rio Tinto controlled arm formerly known as Ivanhoe Australia.

Rio’s subsidiary Turquoise Hill has come to a conditional agreement to offload its 56 per cent stake in Inova to a company called Shanxi Donghui Coal Coking and Chemicals Group, which is reportedly owned by Zhang Yaping and Zhang Weidong.

Now, as required by Australian law, because the brothers are going for more than 19.9 per cent of the target, they have to go for a full takeover offer.

The 22 cents a share offer is a solid 55 per cent premium to Inova’s three-month weighted premium and a 29 per cent premium to its last trading price.

Inova owns a copper and gold mine near Mount Isa and is searching for partners to kick-start the nearby Merlin (great name!) molybdenum and rhenium project.

Rio picked up the majority of Turquoise Hill, formerly known as Ivanhoe Mines, as it jostled for control of the Oyu Tolgoi copper-gold mine in Mongolia.

Wrapping Up

We got a sneak peak at the 360 Capital Property Group backdoor listing via Trafalgar Group yesterday and all the info appears to have been right on the money.

Trafalgar has raised $70.8 million and bought 360 Capital in a scrip-for-scrip deal that has received the go-ahead from independent expert Lonergan Edwards. Shareholders will also need to give the thumbs up.

Now, APN Property Group is reportedly looking to float a new real estate investment trust armed with $400 million in industrial assets if it wins a portfolio from Australand Property Group.

And finally, The Australian Financial Review reports that Kohlberg Kravis Roberts is refinancing $260 million for GenesisCare, which could easily be the prelude to a float on the back of fertility group Virtus Health.