BREAKFAST DEALS: Steadfast progress

Steadfast Group moves full steam ahead towards its IPO, while PrimeAg makes a tidy sum from its last assets sale.

Frank O’Halloran sits atop a rather appropriately named insurance broker given the conditions with which it’s launching itself onto the ASX – Steadfast Group. Meanwhile, PrimeAg has chosen its final play, Discovery Metals is running out of time to do the same, another suitor for Careers Australia Group is reportedly not done with the group and Origin Energy has helped relieve a headache for the New South Wales government.

Steadfast Group

Australian insurance broking Steadfast Group is looking to raise up to $469 million through its planned sharemarket float, according to documents seen by The Australian.

The newspaper reports that the indicative price range for the float has been set between $1 and $1.20 a share, adding that the IPO would proceed if it passes a minimum of $160 million.

JPMorgan and Macquarie Capital are the joint lead managers for the bookbuild, which is slated for July 30.

There were worries for a second there that the disastrous float of health insurance website iSelect could kill the recent improvement in sentiment towards listings and threaten the return of former QBE Insurance boss Frank O’Halloran to the ASX as chairman of Steadfast.

It should be said that iSelect shares have rebounded strongly in recent days, but they’re still 11 per cent beneath the issue price.

Regardless, it’s full steam ahead for Steadfast, O’Halloran and chief executive Robert Kelly.


Speaking of famous chairmen, the Roger Corbett-led PrimeAg has struck a $76 million deal to sell its remaining assets and shares, which will be followed by a delisting.

The rural property owner will sell the last of its shares to private Queensland agricultural company Australian Food and Fibre for $45 million.

PrimeAg will also sell a property at Emerald in Queensland to a group of investors attached to US firm Global Endowment Management.

The company has already offloaded properties to US-based farm investor TIAA-CREF Global Agriculture.

PrimeAg says it expects to rack up between $371 million and $382 million for shareholders from all its sales.

While we’re talking agriculture, the president and chief executive of US grain giant Archer Daniels Midland, Patricia Woertz, has told The Australian that the company will continue to use its legal firepower to make sure it’s not subjected to unfair tax bills in other countries.

Concerns have been raised that the company’s $3 billion-plus offer for GrainCorp might be a stretch due to run-ins with the governments of Argentina and Brazil over tax.

Woertz said ADM would continue to use its lawyers to make sure foreign governments don’t push it around excessively.

“All companies, including multinationals, try to pay as little tax as possible while following the law – both the form and spirit,” Woertz told the newspaper.

All companies? Seriously? We know that absolutely isn’t true. But we also take your point. Don’t pay more tax than you’re due.

Discovery Metals

African-focussed iron ore company Discovery Metals won some breathing space from its lenders yesterday, but the clock is ticking on the embattled miner’s hunt for a suitor.

Discovery shares slipped 11.1 per cent yesterday – that’s not saying much, given the stock is at 12 cents – on the back of a statement indicating that talks with “interested parties” about a possible transaction are continuing.

It also said that its lenders have waived a requirement an additional equity contribution to its Boseto project by August 15.

That all sounds like good reason to boost the stock. The trouble is that there’s a catch.

“An additional event of default will occur if the board has not recommended a bid to acquire the company by 31 July 2013 or the company has not agreed investment terms with a cornerstone investor that are satisfactory to the lenders,” said the statement.

Tick, tock.

Careers Australia Group, White Cloud Capital Advisors, Crescent Capital

The battle for Careers Australia Group appears, in fact, not to be over.

The Australian understands that, White Cloud Capital Advisors has bumped up its offer to 85 cents a share or $114 million. That’s up from the 66 cents a share White Cloud put on the table back in May.

Careers Australia’s independent directors had recommended that shareholders accept the $107 million takeover offer from Australian private equity firm Crescent Capital in the absence of a superior offer.

Well, this sounds superior.

Origin Energy, Eraring Energy, NSW government

Origin Energy has purchased the Eraring power station from the NSW government, housed under the Eraring Energy banner, for the bargain headline price of $50 million.

That sounds like a bargain, particularly given that the O’Farrell government also handed over $300 million in compensation payments to Origin for the cancellation of a supply agreement for the Cobbora coal tenement.

As explained by Business Spectator’s Stephen Bartholomeusz, this is part of a move to unwind the ridiculous arrangement put in place by the previous state Labor government that saddled the budget with $1.7 billion in liabilities. 

Fifty million dollars is a good deal.

Wrapping up

ANZ Banking Group is thinking about giving the green light to a $1 billion hybrid issue as soon as this week, putting it ahead of Westpac Banking Corporation’s subordinated debt issue on July 8, according to The Australian Financial Review.

Sticking with the letter ‘A’, packaging giant Amcor says it’s purchasing the Jiangsu Shenda Group's flexible packaging operations for 350 million renminbi  ($A62.20 million).

Amcor says it expects an EBIT return on funds deployed will be more than 20 per cent by the end of calendar 2016.

In property, developer Mirvac Group is offloading half its stake in land and development of Sydney’s 200 George St site to AMP Capital Wholesale Office Fund.

Mirvac said that the total consideration for the 50 per cent stake would be around $317 million.

Meanwhile, Ramsay Health Care has completed its $500 million joint venture deal with Malaysia’s Sime Darby Berhad and is already thinking about other deals in the region.

Keep an eye on that one.

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