BREAKFAST DEALS: Tinkler sidekick?

Nathan Tinkler makes progress on his Whitehaven bid, while DJs' weird weekend raises regulatory questions.

Nathan Tinkler is busy throwing together a proposal that he hopes can win over the Whitehaven Coal register, and there’s a chance that he might have just won an ally. Meanwhile, the David Jones takeover offer has come to an appropriately ludicrous end. Elsewhere, Hastings Diversified Utilities Fund has given one of its suitors a little extra time to check the books, Nexus Energy looks like it’s sealed the deal with Royal Dutch Shell and Austock has come up with a not-so-small list of objections to the bid by Mariner Corporation.

Whitehaven Coal, Nathan Tinkler

Coal tycoon Nathan Tinkler might have won another comrade for a bid to take Whitehaven Coal private – Hans Mende.

That certainly wasn’t the line from Whitehaven, which announced yesterday that Mende was stepping down as a non-executive director.

"This is consistent with Mende’s decision to scale back his international board commitments,” Whitehaven said in a statement to the market yesterday.

While a lighter work load would be welcome news for anyone, particularly someone who’s been with the company since its IPO in 2007, there’s another theory floating around.

Mende’s main gig is president and co-founder of AMCI Group, which is a majority shareholder in Whitehaven. While other directors who are staying on have ruled out participating in an action by Tinkler, Mende has not.

A report last week indicated that a bid for Whitehaven could come as early as this week.

Recent reports have linked Tinkler to funding talks with Barclays, JPMorgan and UBS, while Hong Kong’s Noble Group and Farallon Capital Partners have been suggested as bidding partners, along with an expected posse of Asian players.

David Jones, EB Private Equity

The now-retired bid for David Jones by UK/Luxembourg-based EB Private Equity has been widely described as 'farcical'.

As Business Spectator’s Stephen Bartholomeusz wrote yesterday, the bid has drawn attention to what is a legitimate takeover target, given the sheer size of the David Jones real estate assets.

But the excuse apparently offered by the retreating suitor has left a sour taste in the mouths of shareholders, who thought they could seriously be looking at a takeover bid, premium and everything.

In a statement to the market yesterday, David Jones said EB had withdrawn its $1.65 billion bid because "recent publicity around its proposal has made it difficult to proceed”.

Presumably EB was taken aback by all the reports that questioned the seriousness of its offer and the shaky ground on which the firm appears to exist.

EB must have seen the reports coming. And it’s not as if chairman John Edgar wasn’t courting the press the whole time. As explained in this morning’s edition of The Distillery, it’s understood he tapped a local promoter to get EB in the newspapers, inherent weirdness and all.

The whole episode raises important questions about the ease with which an unlisted foreign suitor can play muckraker with Australian companies. Journalists are frequently lambasted for spreading rumour and innuendo that moves the market, but nothing Breakfast Deals can remember from a media report compares to this.

David Jones has come under criticism from some corners for passing the information on to the market, but as Bartholomeusz also writes, it did the best under what are undeniably bizarre circumstances.

And informing the market is surely the option that errs on the side of caution.

Hastings Diversified Utilities Fund, Pipeline Partners Australia, APA Group

Pipeline Partners Australia has been given until the beginning of next week to complete its due diligence for Hastings Diversified Utilities Fund.

The last time we received word from HDF, it was merely noting the release from the Australian Competition and Consumer Commission indicating that its judgement on the other bid for the company, from APA Group, would come on July 19.

Pipeline Partners Australia now has until July 9 to finish up with the HDF books and figure out whether to drop some of the conditions on its $2.30 a share bid.

Remember though, this partnership is made up of Canada’s Caisse de dpot et placement du Qubec and Australia’s Utilities Trust of Australia.

The thing is, Hastings Funds Management oversees both HDF and Utilities Trust of Australia. This raises obvious suspicions that the bid has been somewhat engineered to coax a higher bid out of APA Group.

So far, the ASX-listed suitor hasn't budged on its $2.10 offer. An offer that the target again urged its shareholders to pay no attention to yesterday.

Nexus Energy, Royal Dutch Shell

Nexus Energy looks like it’s finally turned its agreement with Royal Dutch Shell into reality, which will see the development of the Crux field in the Timor Sea.

Nexus went into a trading halt yesterday pending an announcement to the market that’s expected perhaps as early as this morning. The Australian reports that neither Nexus nor Shell was confiding anything to the press, but it’s believed this deal is done.

Back in January, Nexus inked a heads of agreement with Shell that would see Nexus get a 17 per cent stake in the project, down from 85 per cent, while minority shareholders Osaka Gas would be reduced from 15 per cent to 3 per cent. Shell would get the rest.

It’ll be a welcome bit of news for Nexus and its new chief executive, Richard Cottee. The company’s share price has shed half its value since the heads of agreement was done on January 19.

Austock, Mariner Corporation

Despite the modest stakes, an interesting tussle is opening up between corporate raider Mariner Corporation and stockbroker Austock.

The struggling target has knocked Mariner’s $14 million takeover offer for Austock back and its subsequent response has shown quite a bit of spunk.

Austock said it wrote to Mariner on June 28 and invited the suitor to withdraw its offer for the following reasons.

Mariner did not make its offer subject to approval from Canberra, which Austock says is actually required before launching an offer under the Insurance Acquisitions and Takeovers Act 1991.

The suitor also needs the approval of the Treasurer to take more than 15 per cent of its target, along with the Pooled Development Funds Board for more than 30 per cent.

And to top it all off, Austock said that the initial offer of 10.5 cents was below the 11 cents a share Mariner paid for shares in the prior four months. That’s breaking one of the most basic M&A rules.

Mariner has since increased the offer to 11 cents a share, but that’s little to mollify a long list of complaints.

Wrapping up

Indian miner Adani has gone from having a memorandum of understanding with QR National over a rail corridor in Queensland to a feasibility study.

It might sound like a little more than word play on shallow investigation, but Adani needs coal for its power plants in India by early 2016 and one of Australia’s biggest obstacles in taking advantage of the resources boom is train infrastructure.

Speaking of trains, Murchison Metals will hold a shareholder meeting on August 16 to consider the distribution of most of its funds.

The news puts to bed the company’s hopes that it might find something to buy with the money it collected from the sale of its stake in the Oakajee Port & Rail project to Mitsubishi.

Still in resources, analysts have expressed confidence that regulators or a rival bidder won’t hamper the St Barbara-Allied Gold merger. That would mean it’s up to the shareholders alone, but we’ll have to wait and see.

And finally, Blackmores has picked up a family-run supplements business FIT-BioCeuticals to pump up its vitamins muscle for $40 million, according to The Australian.

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