BREAKFAST DEALS: Sensis rethink?

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Telstra may take a fresh look at Sensis following its disappointing results yesterday. Meanwhile, Austar could be up for grabs.

Telstra

Telstra's underwhelming results yesterday not only underscore the importance of the telco's talks with the federal government over the national broadband network, but raise questions about what the company can do to arrest its revenue decline. Chief David Thodey is not messing about, skipping the world's largest exhibition for the mobile industry in Barcelona where the telco was tipped to announce a speed upgrade to its Next G mobile broadband network, says The Australian. Meanwhile, the Sydney Morning Herald has one suggestion for Telstra: take a fresh look at directories business Sensis. Telstra's decision years ago to hold on to Sensis amid intense interest from pensions funds and private equity in the sector might have cost shareholders billions, the paper says, and with the M&A sweet spot over and the NBN casting a shadow over future earnings, options include bulking up or demerging. Should it choose to hold on to the business, the thinking goes, Telstra could undertake some cheap acquisitions and help manage advertisers' migration to online and mobile platforms. But if acquisitions for the directories business are unpalatable, a demerger of Australia's biggest advertising business might be the best option.

Austar, Foxtel

Meanwhile, recent talk that regional pay TV operator Austar might be up for grabs was given a fillip yesterday by Telstra's revelation it did not receive a dividend from pay TV group Foxtel, which it owns alongside News and Consolidated Media Holdings. Slowing subscriber numbers and an unwillingness by Foxtel chief Kim Williams to explain where the money would be directed have boosted the case that a long-mooted tie-up between the two might be on the cards, reports the Sydney Morning Herald. Talk on the future of Austar was reignited when its majority shareholder, Liberty Global, spoke of a desire to focus more on Europe and initiated multi-billion-dollar deals to that effect. It would not be the first time a tie-up between the two is seriously considered: in 2007, Telstra refused to pay more than $1.80 per share for the group, shy of Liberty's $2 per share target.

CSR

While CSR is pursuing legal avenues to get the demerger of its sugar and renewable business across the line, a trade sale could still be on the cards with plenty of interested parties believed to be still sniffing around. In particular, CSR is again in talks with China's Bright Foods, says The Australian Financial Review, although discussions are tempered by CSR's commitment to a demerger. The interest comes as the National Australia Bank tips recent adverse weather in China and increasing demand might prompt the nation – the world's second-biggest sugar consumer – to look for imports after April to boost its stockpiles.

National Australia Bank, Royal Bank of Scotland, JP Morgan, Macquarie Group, AMP, AXA Asia Pacific

Over to financials, and talk that JPMorgan might be having second thoughts about the purchase of RBS Sempra could be premature, with reports out of the UK suggesting a deal is imminent. Macquarie had also been in the running for the joint venture. Elsewhere, and a UK banking source has told the AFR that National Australia Bank is more likely to fly solo then join a syndicate for the 300-plus Royal Bank of Scotland branches up for grabs. The NAB – which had been linked to US private equity firm Blackstone and the UK's Resolution in the RBS sale – will receive a prospectus by the month's end, the paper says. Also, AMP chief Craig Dunn has reportedly told employees the company is "encouraged” by the Australian Competition and Consumer Commission's preliminary release about the bidding war for AXA Asia Pacific, in which the regulator said the NAB offer raised a higher level of concerns than AMP's bid. According to the Fin, Dunn again noted that the "AXA story” had a long way to go. And finally, ANZ Banking Group has raised $1.8 billion without the soon-to-be scrapped government guarantee, having initially set out to raise less than one third of that amount.

Wrapping up

Elsewhere, and a capital raising and equity swap have been tipped for Charter Hall as the fund manager snaps up the management rights to listed property trusts, Macquarie Office and Macquarie Countrywide. Over to resources, and Nathan Tinkler's Aston Resources has decided against a funding deal with Hong Kong commodity trader Noble Group, says The Australian Financial Review, and is understood instead to be working a fund-raising deal for its purchase of the Maules Creek deposit. And with Arrow Energy moving to take control of its Fisherman's Landing liquefied natural gas project, recently dubbed by RBS as the least likely of Queensland's five LNG projects to go ahead, a Sanford C. Bernstein analyst, Neil Beverage, says Origin Energy and Conoco look further behind, reports Bloomberg.