BREAKFAST DEALS: Stalling Tinkler?

Nathan Tinkler reportedly looks for more due diligence time on Whitehaven, while John Pollaers could change Pacific Brands' destiny.

Nathan Tinkler is said to have been asking Whitehaven Coal for more time to conduct due diligence last night, let’s wait and see if the producer has something to say this morning. Elsewhere, Pacific Brands has taken a new chief executive that has experience turning a company around and flogging it. Nice choice! Meanwhile, Terry Davis has another piece of the beer puzzle for when Coca-Cola Amatil can starting chugging again, Nine Entertainment can’t afford to break stride after the NRL deal with asset sales on the cards and the South Australian government had something to celebrate yesterday, even if it didn’t involve BHP Billiton.

Whitehaven Coal, Nathan Tinkler

Whitehaven Coal shareholders and Nathan Tinkler enthusiasts should keep their eye on the producer this morning for an announcement.

According to The Australian Financial Review, an extension to the due diligence period that The Tinkler Group, the coal magnate’s co-bidders and lenders were enjoying up until yesterday has been sought.

Any extension might result in a slight drop in Whitehaven shares, which finished a wild session yesterday up 3.5 per cent at $3.54. That followed a session where new lows were reached in the morning, before the stock surged more than 10 per cent.

The surge could have been short sellers covering their positions just in case Tinkler pulls off the deal.

Whatever the case, the word out there is that Tinkler needs to find another $1 billion in funding to make this work.

Unless the former electrician had a big night at the craps tables last night, there might be some news on an extension request before trading begins.

Pacific Brands

It’s difficult to tell whether the elevation of former Foster’s Group chief executive John Pollaers to the top job in Pacific Brands influences the company’s destiny one way or another.

Will he turn it around, or ultimately usher it into the hands to private equity?

The share price dropped 1.7 per cent upon the announcement of results that were terrible, but in line with expectations, and the departure of chief executive Sue Morphet.

The market might be expressing some regret that Morphet is gone, or some old-fashioned caution for managerial change.

Whatever the case, Pollaers has the pedigree to lead a continuation of the PacBrands turnaround or manage a takeover transition.

Pollaers was off trying to turn brewer Foster’s around when SABMiller came knocking with a bid that proved successful.

PacBrands of course entered into very preliminary talks with Kohlberg Kravis Roberts and there was speculation that other private equity players were looking on to see what happened. Not much is what they saw and no one has emerged since KKR walked away.

Media reports indicate that Pollaers likes the job because he wanted to stay in Melbourne with his family.

Sounds perfectly reasonable, but does PacBrands only want him for his ‘can do’ attitude?

Coca-Cola Amatil, Casella Group

Coca-Cola Amatil chief executive Terry Davis has all the ingredients he needs to re-enter the Australian beer market when the company’s sabbatical ends in December next year; with the exception of a premium beer brand to flog.

But there’s time to get that.

Along with its results yesterday, that were better than expected, CCA announced that it has entered into a joint venture with the maker of Yellow Tail, The Casella Group.

CCA will lend $46 million to a joint venture called Australian Beer Company, which is simple enough. The company added that the joint venture will acquire a brewing facility recently established by Casella.

"This new agreement … will enable us to re-enter the premium beer market in Australia after December 16, 2013,” said Davis.

The drinks maker said the loan will convert to equity once December 16 next year hits.

Davis said the arrangement would be similar to the Pacific Beverages joint venture CCA shared with SABMiller, which was cleaned up when the London-based company cleaned up when it purchased Foster’s Group.

As part of the deal, CCA was required to exit the Australian beer market and Davis has been plotting the re-entry ever since.

CCA is also planning to acquisition a brewery and distillery in Fiji to compliment its distribution agreements with Grupo Modelo, Carlsberg and Molson Coors in the Pacific Islands.

Nine Entertainment, ACP Magazines

Such is the trouble that Nine Entertainment and owner CVC Asia Pacific find themselves in that they can’t catch their breath after a lung-busting set of negotiations to secure to ARL broadcasting rights.

According to The Australian Financial Review, one of the next items that Nine chief executive David Gyngell and CVC are looking at is the potential sale of the ACP Magazines publishing arm.

The newspaper understands that German publisher Bauer has been engaged in due diligence and is weighing up an offer for the division.

The newspaper didn’t put a figure on what Nine might be able to get for the sale if it goes ahead.

ForestrySA, The Campbell Group

Concerns that the South Australian government might abandon its sale of harvest timber plantation rights at ForestrySA have turned out to be premature.

The state government announced yesterday that North American timber company The Campbell Group has secured the rights for $650 million.

Treasurer Jack Snelling described the successful offer as a "very strong price”.

It’s just as well that the South Australian government has some good news to announce, given the repercussions of BHP Billiton’s decision to mothball the Olympic Dam project.

Chief executive Marius Kloppers acknowledged yesterday that the Rann and now Weatherhill governments had done just about everything in their power to secure BHP’s development dollars.

The decision means that a host of development, construction and services contracts that BHP would have done to realise its Olympic dream in the Festival State won’t happen; at least, not for a while.

Speaking of which, BHP didn’t offer the market much more detail on its "review” of its diamond operations, simply stating that it’s "ongoing”.

Revenue from the diamond operations fell 13 per cent to $1.3 billion for the year to June, with underlying earnings dropping 66 per cent to $199 million.

Sliding production from the Canadian Ekati mine was blamed for the numbers, although strength in diamond prices were stronger than the previous year.

Wrapping up

Today’s an important date for QR National. The company isn’t just reporting half-year results to the market. It’s doing so with the Queensland government’s restriction on share sales officially over.

So far, the Newman government has made it quite clear that it’s keen to sell down the $3 billion stake in order to pay off the state’s $85 billion debt.

Whether that begins immediately remains to be seen. It might be that the government waits for the upcoming state budget, which is only a few weeks away.

Meanwhile, no sooner had we counted in a local player for ClearView Wealth Management, they’re out.

The Australian Financial Review believes that Archer Capital has withdrawn from the race for the mid-tier insurer, saying it was unlikely to meet the range slapped on the target by the independent expert.

KPMG says ClearView should fetch between 68 cents and 74 cents a share. At the moment, Crescent Capital Partners is offering 50 cents, or $214 million for the lot.

The newspaper says The Carlyle Group still appears to be in the hunt.


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