BREAKFAST DEALS: Stoking Ten's fire

Kerry Stokes amps up the free-to-air stakes by buying into troubled Ten, while Fairfax sees a flurry of trades.

This morning everyone's talking about share registers: Kerry Stokes has reportedly snuck onto Ten's, the Lowys have left Westfield Retail Trust's, and there's been a flurry of activity on Fairfax's. Elsewhere, James Packer has flown to Sri Lanka to investigate investment options, while the Future Fund's airport plans may be grounded.

Seven Group, Ten Network

Ten Network's offscreen drama has more twists than an episode of Homeland. After firing its chief executive and rebutting controversial News Corp takeover rumours, the broadcaster has reportedly added Kerry Stokes to its register with a $40 million holding – or just under 5 per cent.

The Australian Financial Review understands the Seven Group chairman quietly accumulated the stake ahead of Ten's annual meeting on December 6. He is also said to have participated in the ailing broadcaster's $230 million second capital raising to preserve his holding.

So, why did Stokes buy into Ten's troubles? There are two theories making the rounds this morning.

The first is that Stokes simply wants to rattle long-time rival Lachlan Murdoch, who owns 9 per cent of Ten. Let's not forget Ten's recently-ousted chief, James Warburton, was poached from Seven just last year.

The second theory is that Stokes is positioning himself for the expected elimination of the federal government's so-called "reach rule", which bans metro television networks from reaching more than 75 per cent of the national population. That effectively prohibits mergers with their respective regional partners.

If the law were scrapped as part of the government's wider media reform package, there has been talk about Ten being acquired by its regional affiliate, Southern Cross Media. Prime Media chief Ian Audsley has also been touting the benefits of a future tie-up with Seven.

For now, though, we're left guessing – neither Stokes nor Ten is commenting.

Fairfax Media

Ten isn't the only media stock to have seen some action. There has apparently been a flurry of buying activity at Fairfax, giving weight to the view the troubled publisher is undervalued.

The Australian reports 137 million Fairfax shares changed hands this week, the equivalent of 45.5 million a day, more than double the 21 million average for the past three months. The trading, dominated by Citigroup, has lifted the company's stock price to 57 cents up 10 per cent since Monday.

Bell Potter recently named Fairfax among the most undervalued companies on the market, pointing to the newspaper group's $197 million in net debt and $1.3 billion in market value.

Who's buying? Only time will tell.

Westfield Retail Trust

The powerful Lowy family says it's looking to diversify its investment portfolio internationally, after it offloaded its $663.7 million stake in Westfield Retail Trust.

The block trade, run by UBS, is being touted as the largest on the Australian stock exchange this year: 7.1 per cent of the listed satellite changed hands at $3.09 per share. The deal was also timed to to allow the family to keep a handy $20 million dividend paid by WRT yesterday.

It's important to note the family isn't running for the exit. LFG still owns more than 8 per cent of WRT's parent, Westfield Group, which maintains significant ties to the satellite via management rights.

But the deal does beg questions about the long-term prospects of WRT, which has been struggling with weak consumer demand at its collection of malls in Australia and New Zealand. The sell-off was, after all, announced alongside a 2 per cent fall in profits.

Speaking to The Australian, fund managers and analysts pointed to the relatively weak performance in the the rental growth at WRT's 47 shopping centres. The expectation is that the Lowys will funnel takings from the sale into non-property investments overseas.

Wherever it's directed, $663.7 million could fund something big.

Archer Capital, Lend Lease

Speaking of offloading assets, Lend Lease has sold its aged care business to private equity firm Archer Capital for $270 million.

The business, which includes 30 facitilites, will now be rolled into Archer's Australian Aged Care Partners division. And growth is unlikely to stop there.

You see, this is Archer's first purchase since raising $1.5 billion more than a year ago. The Australian Financial Review reports Archer is likely to pump more of those funds into AACP, bulking it up with acquisitions over the next five years or so.

Then investors might be in for a sizeable IPO.

Wrapping up

Crown is apparently considering making its mark in Sri Lanka, which could be the next destination for its global casino and hotel empire.

The Sri Lankan government has confirmed Crown chairman James Packer visited the island nation this week to discuss investment options. The government wants the casino operator to consider investing in a large city hotel in the capital, Colombo, and to investigate other opportunities in picturesque Tincomalee, on the east coast.

"They have not finalised the area and the amount they are going to invest," Lakshman Yapa Abeywardene, Sri Lanka's Minister of Investment Promotion, told Reuters. "The government has asked them to come up with a proposal."

And while one executive jets around exotic locations, the Future Fund's airport ambitions may yet be shot down.

The Australian reports the Future Fund may miss out on large chunks of the $2 billion worth of airport investment it sought in a deal with the Australian Infrastructure Fund, after other shareholders in those assets exercised pre-emptive rights to increase their holdings.

The newspaper says investors in Queensland Airports plan to exercise their right to match the price offered by the Future Fund and divide the AIX holdings between themselves.

Shareholders in Melbourne Airport have already exercised pre-emptive rights to split AIX's 20 per cent stake, but it is unclear whether shareholders in Perth Airport planned to do the same.

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