BREAKFAST DEALS: Symbion medicine

Symbion’s float gives a hand to the local IPO market, while Nine plays hard to keep things cricket.

Pharmaceutical wholesaler Symbion is heading for the ASX after its Swiss owners sold the business to New Zealand’s EBOS Group. Nine Entertainment is having to stretch itself to keep the cricket broadcasting rights. Elsewhere, Optus has two big private equity players fishing for its Australian satellite business and Australand Property Group apparently has someone hunting part of its residential book.

EBOS Group, Symbion

It’s always hard for Australians to accept a hand from Kiwis. But the local float market has little choice.

New Zealand’s EBOS Group is heading towards an ASX listing after purchasing Australian pharmaceutical wholesaler Zuellig Healthcare Holdings Australia, known as Symbion, in a $NZ1.1 billion ($922.9 million) deal.

“We will be doing an ASX listing by the end of the calendar year. We think that that’s very important given the revenue streams coming out of Australia,” EBOS managing director Mark Waller said in a call to journalists yesterday.

“We are bringing together two businesses that are very well-matched geographically and operationally and are leaders in key segments in their respective markets.”

The Hong Kong-based owner of Symbion, Zuellig, is getting $NZ498 million in EBOS scrip and $NZ367 million in cash, with EBOS also taking on $NZ230 million in Symbion’s debt.

EBOS will fund the cash component with $NZ140 million in new debt, a $NZ90 million placement and a $NZ149 million pro rate renounceable entitlement offer. Forsyth Barr Group and UBS New Zealand have been brought in to fully underwrite and manage the raisings.

Zuellig was advised by Fort Street Advisers and will end up with a 40 per cent stake in the merged entity.

EBOS has been an on acquisition spree in recent years and that’s paid off handsomely. The company’s stock has consistently risen over the last five years, steadily doubling in value.

But the Symbion deal is by far the biggest in the company’s history.

Nine Entertainment, Cricket Australia

Nine Entertainment is having to go to unusual lengths to match Ten Network’s offer for Cricket Australia’s broadcast rights to keep a staple sport on the network.

The Australian understands that Nine’s US hedge fund owners Apollo Global Management and Oaktree Capital aren’t interested in going further into debt to match Ten’s bid.

This is hardly surprising. Apollo and Oaktree snapped up a big chunk of debt previous owner CVC Asia Pacific used to buy Nine with when the company wasn’t generating sufficient returns to pay it down.

Apollo and Global have always been looking for a quick float and exit, the question was only whether this would be in 2014, or if they could bring it forward to 2013.

Interestingly, the newspaper reports that the two hedge funds don’t like the idea of increasing their exposure to Nine, “particularly at a time when currency risk emerges”.

As readers would be well aware, the Australian IPO market has been in the toilet for a long time and even the Federal Reserve’s QE3-inspired equity rally wasn’t enough to actually coax some big floats onto the ASX. There are tentative moves in a number of sectors, but so far no headliners.

The removal of QE3, or at least the conversation around it, creates uncertainty in the market, which is the enemy of IPOs.

However, the greater the bets against the Australian dollar – the worst performing currency in the world at the moment with the exception of the Syrian pound – on the back of Ben Bernanke’s public musings, the less return Nine’s owners will get for a float.

This will no doubt be on the minds of other players that have considered floating their businesses recently. We’re thinking Genworth Financial with its Australian business and Hong Kong’s CLP Holdings, which owns TRUenergy.

And just to return to Nine for a moment, apparently chief executive David Gyngell is looking for ways to acquire TV stations from WIN Television’s Bruce Gordon in Adelaide and Perth and apply certain cost saving measures to raise the cricket money that way.

Has Nine ever had to stretch itself so hard to keep broadcasting the game of cricket?

Singapore Telecommunications, Optus Satellite, Kohlberg Kravis Roberts, Carlyle Group

Private equity giants Kohlberg Kravis Roberts and Carlyle Group are reportedly sizing up Singapore Telecommunications’ Optus Satellite arm, which could generate $2 billion.

SingTel hired Credit Suisse and Morgan Stanley to help out with its “review” of the business back in March, which examined a trade sale, spin-off and an IPO.

According to Reuters, sources indicate that KKR and Carlyle are preparing bids for the business, while French satellite giant Eutelsat Communications, Blackstone Group and Providence Equity Partners are also expected to put in a bid.

Australand Property Group, Satterley Property Group

Developer Satterley Property Group is reportedly popping up as a possible bidder for “about half” the residential book of Australia Property Group.

The Australian Financial Review reports that the private group of Nigel Satterley is known to have held discussions with Australand for its Western Australian and Victorian residential land assets.

With GPT Group out of the race for the rest of the Australand book and Mirvac Group unmoved, Australand’s majority shareholder Capitaland will need more than Satterley’s selective interest to get a deal done.

But it’s something at least.

Wrapping up

BHP Billiton is continuing its cost-cutting promotion program with more reinforcement that asset sales are coming.

The fact that the company’s coal assets were given such attention probably underlines which division might be a particular focus of asset sales.

Meanwhile, contractor Downer EDI has completed a new issue of fixed rate senior unsecure notes at 260 basis points over the swap rate.

The $150 million issue is a simple replacement for its $150 million note that’s maturing in October.

And finally, Transfield Services has picked up a combined $157 million in contracts between deals with SP Ausnet, New Zealand’s Todd Energy, BHP’s Yarnima power station and Santos.

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