BREAKFAST DEALS: Stokes' windfall?

Send your tips to deals@businessspectator.com.au and don't forget to watch Deals TV for new rumours and reports later on this morning. Plus, you can follow us at www.twitter.com/WheelsDeals

Seven Network shareholders are nervous about a merger with WesTrac, saying the proposed pricing favours Kerry Stokes.

Seven Network, WesTrac, Consolidated Media

The charm offensive has begun on the clunky merger proposal for TV company Seven Network and Kerry Stokes' earth-moving business WesTrac. Stokes' so-called right-hand man, Peter Gammell (who will head the merged entity), and WesTrac chief executive Jim Walker have met with key Seven shareholders to discuss the proposed deal, reports The Australian. One shareholder, White Funds Management managing director Angus Gluskie, told the paper while he was not opposed to combining the assets, there was concern the pricing was a "little bit in favour of Stokes”. Paul Xiradis, of 7 per cent shareholder Ausbil Dexia, has told The Age it would take some time to conclude whether the proposal is fair and reasonable. And while the Seven/WesTrac tie-up is seen as a solid platform for future media plays, Consolidated Media was keen yesterday to distance itself from the goings-on. ConsMedia told analysts it didn't expect the Seven rumblings to have an impact on its business, and noted the standstill agreement between Stokes and James Packer which applies until September. (Following a share raid last year, Seven has 22 per cent of the Packer-backed ConsMedia, which owns 25 per cent of Foxtel). ConsMedia added while it does not target a large cash balance in the absence of an acquisition opportunity and is looking at a number of ways to deploy its $300 million in cash, no decision has been made on a purchase.

AXA Asia Pacific, AXA SA, National Australia Bank

As the media seems to be souring on National Australia Bank's expensive plans to bulk up its wealth management business through the purchase of AXA Asia Pacific's Australasian business, an agreement between the Melbourne-based bank and the target's parent seems to have been pushed back. Sources have told Bloomberg the NAB and AXA SA now have a March 17 deadline on a deal, which coincides with the ACCC's rulings on bids from both the NAB and wealth manager AMP. The delay has occurred because AXA SA requires regulatory approval in several countries, the sources said. Now to see whether AMP comes back with another offer (to top its 'best and final' one) and the competition regulator clears the respective offers. Also in banking news, and ANZ Banking Group, which is set to farewell its long-serving chair Charles Goode, has been tipped by The Australian to show an increase in mortgage sales when it reports this Friday.

News Corp, APN News & Media

Back to media news, News Corp has struck another deal with Saudi tycoon Prince Alwaleed bin Talal, whose Kingdom Holdings holds 7 per cent of News Corp's class B shares. Under a deal dubbed a "qualitative leap” for the "whole Arab world”, News will buy 9 per cent of Rotana Media and could end up with 18 per cent of the Middle Eastern broadcaster and music group, ahead of its planned IPO. Prince Alwaleed downplayed talk an Arabic Fox News could be on the cards. Elsewhere, APN News & Media – part-owned by Independent News & Media, which is effectively run by bondholders and has been selling off non-core assets of late – struck a cautiously optimistic tone yesterday, after swinging to a half-year profit.

Telstra

With Telstra shares diving yesterday as the Future Fund was freed to sell more of its stake in the telco and Communication Minister Stephen Conroy's office flagging a willingness to allow the ACCC greater input into the separation of the company, one would think no more Telstra gossip could emerge. Still, the Sydney Morning Herald has named Telstra's directories business Sensis as a logical buyer of New Zealand Yellow Pages, tipped to sell for around $1 billion, about half the price paid by Canadian pension fund and private equity firm CCMP in 2007.

Wrapping up

Fund managers say BHP Billiton will be holding non-deal roadshows with Australian bond investors in March to discuss its operations, Reuters reports. Meanwhile, The Australian is reporting that the long-awaited tax review headed by Treasury's Ken Henry might be released in mid-March. Elsewhere, the Takeovers Panel is set to change the rules on break fees, capping charges at one per cent of the equity value of a deal in most cases and trying to ensure charges stay in place only for a "reasonable” amount of time, The Age reports. The changes seek to address concerns the charges serve as a deterrent to rival bidders.