BREAKFAST DEALS: The next Don?

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Could BHP bid for Mosaic, PotashCorp or Canada's Athabasca in the global game for fertilisers and could the Big Australian appoint Jacques the Knife or John Schubert to replace Don Argus? Plus, news on Holden, a possible Telstra demerger, Ten Network Holdings, China's ravenous oil companies, Virgin Blue, and lots more.
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BHP Billiton

Brazilian mining giant Vale has denied it is in talks to buy American fertiliser business The Mosaic Company, reigniting earlier speculation that BHP Billiton is mulling a $US25 billion bid for the Minnesota-based firm. BHP has otherwise been considered a contender Potash Corporation of Saskatchewan (PotashCorp), plus Potash One and Athabasca Potash, both also based in Saskatchewan. Late last week Athabasca announced it would sell all or part of its business. Along with BHP, Germany's K S (i.e. the old Kali und Salz), state-owned Indian Potash, Russia's Silvinit and Uralkali, also of Russia, are thought to be likely bidders. CIBC World Markets and Genuity Capital Markets are advising Athabasca on its options. The developments come as London's Telegraph reports that Jacques 'The Knife' Nasser and John Schubert are being considered to replace outgoing BHP chairman Don Argus. The two prominent executives – Nasser used to run Ford, and Schubert is currently chairman of the Commonwealth Bank – are expected to be interviewed later this week. Schubert will quit as chairman of CBA if he gets the gig, the newspaper said. Nasser, the hard-nosed cost-cutter who ran Ford between 1999 and 2001, is meanwhile thought to have the support of Argus.
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Ford Motor Company, Volkswagen and General Motors

Speaking of Ford, America's biggest car company could soon raise $US3.5 billion in equity capital, according to JPMorgan analyst Himanshu Patel. The raising, which along with refinanced debt, cash flow and government funding, would help repay $US10.5 billion in debt maturing in December 2011, shows that none of the global car giants are immune from balance-sheet pressures. Volkswagen is meanwhile thought to be close to securing control of sports car company Porsche, according to Germany's Der Spiegel. The carmaker's controlling families will accept Volkswagen's €8 billion offer on Thursday, the magazine said. Ferdinand Piech, the chairman of Volkswagen, heads one of the family factions that has been competing for control of Porsche, but a takeover could see current Porsche CEO Wendelin Wiedeking replaced by Piech's cousin Wolfgang Porsche. Over at General Motors' Opel division in Europe, Belgium's RHJ International has made final a €275 million offer, in what has been described as a last-ditch attempt to acquire majority ownership of the division. Austro-Canadian parts manufacturer Magna International – backed by Russian money – is leading the race, but China's Beijing Automotive is believed to be backing out. Meanwhile, no news yet on last week's slip-up when an executive from China's third-biggest carmaker, Dongfeng Motor Corporation, said it was interested in buying GM Holden. The interest has subsequently been denied by Holden and, strangely, the Australian government, but Dongfeng is certainly on the march, having just recently announced a 20 per cent boost to its joint venture with Nissan and Honda.
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Virgin Blue Holdings

Over to big, expensive vehicles in the sky, the drum continues to beat for Virgin Blue Holdings, with The Australian reporting that it is in talks with an unnamed Middle Eastern airline, most likely to be Emirates or Etihad, respectively based in the competing Gulf cities of Dubai and Abu Dhabi. Recently, this column reported various rumours that Singapore Airlines, Air New Zealand and Delta Air Lines were all considering a cornerstone investment or closer cooperation with the carrier, Australia's second-biggest airline. The problem however is Airlines have come under even greater pressure to tie up after the US Transport Department approved a code-share alliance between United Airlines and Continental Airlines. Short of a merger, British Airways, American Airlines and Spain's Iberia are seeking the same approval. Over in China, China Eastern has taken over Shanghai Airlines, while in Europe Austrian Airlines is up for grabs. With airlines finding it increasingly difficult to compete on price, more mergers can be expected. If you can't beat 'em, join 'em.
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Telstra Corporation

One company that may do the opposite of a merger is Telstra Corporation, which has been put under further pressure by the government to split its copper network from the rest of its business. Speaking to Inside Business on ABC television yesterday, communications minister Stephen Conroy said that it would be better for the proposed National Broadband Network to work with Telstra rather than compete with the existing copper network. No kidding. Directors of the NBN are expected to be announced this week.

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Ten Network Holdings

Canwest Global Communications, which owns 56.6 per cent of Ten Network Holdings, has yet again managed to win a last-minute reprieve in its debt repayments, easing – for now – pressure to sell Ten, one of the Canadian media group's better assets. Like Bruce Willis in Die Hard, Canwest's escape from the corporate undertaker has been nerve-racking and improbable. Improbable considering that Canwest's market capitalisation is hovering around $C24 million ($27 million), down from $C2 billion, and it still has around $C4 billion in debt. Even more improbable considering that one of Canwest's lenders, CIT Group, is itself fighting off bankruptcy. CIT, which in Australia owns the consumer credit book for brands such as Honda and Dell, is seeking a $US2-3 billion lifeline. Goldman Sachs and JPMorgan Chase have been named as possible rescuers. Over at Canwest, the firm now has until July 31 to reach a deal with its lenders. By the Ten Network can expect to have counted the beans for its success with shows such as Masterchef ahead of a very possible sale.
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Wrapping up

Anglo-Indian ArcelorMittal and Russia's United Company Rusal are two other firms restructuring truckloads of debt. ArcelorMittal, the world's biggest steelmaker and a key customer for Australia's iron ore industry, is expected to modify $US31 billion worth of debt covenants in the coming days, while Rusal, the world's biggest aluminium company after Rio Tinto Alcan, is changing the terms of $US7.3 billion worth of debt. Russian oligarch and Rusal shareholder Mikhail Prokhorov recently said he would create a new rival to BHP Billiton through a merger of Rusal and Norilsk Nickel, of which he used to own 25 per cent. Over in the global oil industry, it is China's state-owned petroleum giants that are looking to be the new rivals to the likes of ExxonMobil, BP and Royal Dutch Shell. CNOOC and Sinopec late last week agreed to pay $US1.3 billion for 20 per cent of an oil block off Angola from Marathon Oil and rumours continue that China National Petroleum Corporation (CNPC) is eyeing 75 per cent of YPF, the Argentine unit of Spanish major Repsol YPF. CNOOC is believed to want the other 25 per cent stake, if, and it's a big if, the Argentine government allows the sale.