BREAKFAST DEALS: Tinkler crunch

Nathan Tinkler seems determined to do what it takes to achieve his Whitehaven dream, while James Packer goes online.

Mining dealmaker Nathan Tinkler expressed confidence last week that his bid for Whitehaven Coal will come together. This morning, Fairfax is carrying a story suggesting that Tinkler has from the start been willing to part with quite a lot to make it happen. Elsewhere, fellow Aussie tycoon James Packer is building his family’s online interests, while REA Group is looking at acquisitions. Finally, Ivanhoe Australia is looking at joint ventures to save some cash and questions are being asked about the consistency of statements between Goodman Fielder and Wilmar International.

Nathan Tinkler, Patinack Farm, Whitehaven Coal

More signs of stress have emanated from the empire of Nathan Tinkler as he attempts to take Whitehaven Coal private for $5.3 billion

According to Fairfax, Tinkler attempted to sell his entire hand in the horse racing and breeding business Patinack Farm to Sheikh Fahad al-Thani – a member of the Qatari royal family and owner of Dunaden, last year’s Melbourne Cup winner – for $200 million.

That’s a big discount on the $300 million he’s reportedly spent building that presence in the sport of kings. Despite this, a source told the media group that Tinkler was engaging in "wishful thinking” and while he owns a lot of horses there "isn’t a lot of quality”.

The news follows similarly curious developments on Tuesday for Tinkler’s Whitehaven plan.

The former electrician’s private investment vehicle Mulsanne Resources failed to come up with $28.4 million for Blackwood Corporation as part of a share placement that was agreed upon by shareholders over a month ago.

The deadline had already been extended.

While this all sounds very negative, Tinkler’s failed attempt to offload his racing assets happened back in June. Since then a lot has happened.

Just ten days ago Tinkler gave an upbeat interview to The Australian about the prospects of finalising a bid for Whitehaven within a week.

It gives important context to the suggestion that Tinkler’s has stretched himself too far.

Ellerstone Capital, James Packer, Trade Me

Gaming billionaire James Packer has quietly increased his family’s holdings in online trading with a substantial stake in New Zealand’s Trade Me.

A substantial shareholder notice lodged yesterday on the New Zealand Stock Exchange indicates that the Packer family-controlled fund manager Ellerstone Capital has picked up 5.18 per cent of Trade Me.

Ellerstone paid an average of $2.73 a share for the stake between 19 transactions taking place between April and August.

The New Zealand online trader of just about everything imaginable was purchased by Fairfax Media in 2006 for $NZ750 million ($581.2 million). The publisher floated Trade Me in November last year and sold down another 15 per cent in June, leaving it with a 51 per cent stake.

This is hardly Packer’s only foray into the online trading market. Ellerstone also picked up a 30 per cent stake in DealsDirect last year, while Packer’s majority-owned Consolidated Press Holdings paid about $80 million for direct stakes in and Catch of the Day.

Of course, those Scoopon and Catch of the Day stakes are up in the air as far as Packer is concerned. The billionaire is looking to exit CMH in order to raise a couple of billion dollars for his play at Echo Entertainment.

While we’re talking online players, REA Group has told The Australian that it’s on the hunt for acquisitions.

The publisher of says it’s looking at "geographical frameworks” and won’t be treading outside its home turf into cars and jobs.

Ivanhoe Australia, Rio Tinto

Ivanhoe Australia says it will consider a number of joint ventures to reduce costs over the next two years.

In fact the miner, now controlled by Rio Tinto through the global miner’s majority stake in Canada’s Ivanhoe Mines, has identified $125 million in capital and operating-cost savings.

Yet the share price plunged 5.9 per cent to 40 cents against a 1.1 per cent rise on the benchmark index.

On fact value, it’s a curious reaction. The Australian reports that analysts found the statement from Ivanhoe none-too-surprising. Plans to defer some spending decisions and reigning in exploration have been well flagged.

Perhaps the market was hoping for something much bigger.

Ivanhoe’s share price has been sliding ever since Rio got its new vehicle rethinking its strategy. So much so in fact that Ivanhoe stock has sunk 71.8 per cent in 2012.

Yeah, maybe the market was hoping for something bigger.

Meanwhile, analysts are of the impression that Rio chief executive Tom Albanese is unlikely to be tempted into assets that have been beaten down by falling metals prices.

Goodman Fielder, Wilmar International

The corporate regulator should have a look at apparently contradictory statements from Goodman Fielder and Singapore’s Wilmar International.

That’s the opinion of respected M&A watcher Bryan Frith of The Australian.

Wilmar hooked on to the Goodman Fielder register in February via UBS. In the end it secured 10.1 per cent of the company.

Speculation of a full bid ebbed as the breadmaker moved towards selling its edible oil and fats business.

Goodman said before the 10.1 per cent stake became official that it hadn’t received any proposal from Wilmar. It appeared the Singaporeans might be building nothing more than a stake to block another potential offer or get a seat at the oil and fats table.

Nevertheless, shareholders bought the Goodman Fielder takeover target story and pushed the stock up.

Now, Goodman has had to deny suggestions from Wilmar executive chairman Kuok Khoon Hong that the Singaporeans made a proposal to Goodman Fielders that, Kuok claims, was too low for the target’s board.

Frith reports that Wilmar general counsel La-mei Teo has told him personally that the company stands by Kuok’s comments and that "a proposal was made for the acquisition of Goodman Fielder”.

Either Goodman Fielder is holding back details of a proposal that was too incomplete for the market or the Australian Securities and Investments Commission has something to find.

Wrapping up

The latest chapter for Australia’s struggling stockbroking industry has seen the private client advisor network of Cameron Securities get snapped up by BBY.

Brokers are battling a terrible stubborn marketplace, part of which is reflected in the morning’s edition of The Distillery with a discussion about the latest results from ASX.

Fairfax Media’s newest substantial shareholder, Lazard Asset Management, is understood to be in favour of a breakup of the company, according to The Australian.

Lazard popped up on Fairfax’s register earlier this week, having forked out $62 million for a stake of more than five per cent.

In pharmaceuticals, the right to sell a number of GlaxoSmithKline products in Australia has been sold by the British drugmaker to Aspen Pharmacare Holdings.

Fashion brand Oroton Group hasn’t been so lucky, having lost its licence to exclusively distribute Ralph Lauren to Australasia.

And finally, keep an eye on APN News & Media, which is due to hand down interim results today.

The Australian Financial Review reports that sources close to the company have ruled out an equity raising. But the newspaper also says that investors should look closely at APN’s debt ratios and perhaps looks out for potential asset sales.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles