BREAKFAST DEALS: Toll handover

Toll Holdings' lengthy succession process looks closer to delivering a successor to long-serving boss Paul Little as the company set its sights on US expansion. Meanwhile, a serious distraction looms for rare earth miner Lynas and its boss Nic Curtis, with two major shareholders preparing to grab the Crown and Swan deposits. Elsewhere, an ambitious St Barbara sets its sights on becoming the second biggest local producer, Wah Nam Holdings snares a controlling stake in Brockman Resources and Agrium's Landmark business may spoil Coles' move on lamb processor CRF. Finally, Nine Entertainment takes a 20 per cent stake in an online shoe retailer and a Burrup Fertilisers' ammonia plant may have a new heavyweight suitor.

Toll Holdings

Toll Holdings is reportedly set to unveil the successor to veteran boss Paul Little by August with three external candidates and a one local contender making it into the final shortlist. The news should be welcomed by Toll shareholders who have no doubt been wondering just how long it was going to take for management to find someone of the same standing as Little and where they were coming from. Little, who announced his decision to step down last October, recently told Business Spectator that a lengthy search process conducted by Toll's management along with his decision to return to Toll's board as a non-executive director after a year's break was in the best interest of shareholders. The issue of Little's return has been widely seen as a major sticking point in the succession plans and it looks like the final four have been carefully briefed on the situation. Toll's chairman Ray Horsbrough has told The Australian that the board has been at pains to make potential candidates understand the Little scenario and understand that after helping create the company 24 years ago Little is not in a mood to walk away completely. Horsbrough also told the paper that expansion of the freight forwarding in the US will be a top priority for the incoming CEO, which may explain the three offshore candidates on the shortlist. Overall the message from Toll looks pretty clear, they are looking for candidate who can lead the company's aggressive plans in the US and will be comfortable with the presence of Little for some time to come.

Lynas Corporation

If Lynas boss Nic Curtis thought that scuttling the planned deal with Forge Resources to offload the Crown and Swan deposit was going to put the related controversy to bed then he is in for a shock with reports that two major shareholders are continuing with their push to grab the assets. Melbourne-based software millionaire Mark Suhr and online recruiter SEEK's chairman Bob Watson had threatened a bid when the Lynas-Forge deal was still alive but Fairfax papers report that the decision to nix the deal hasn't stopped the two shareholders from preparing an offer. Suhr and Watson have got a pretty strong hand here given Lynas' readiness to flog the assets to Forge for $20.7 million. So Lynas' management may struggle to come up with reasons for rejecting any bid that will be similar to the Forge deal. The one unknown for now is how the majority of institutional shareholders, who really just want Lynas and Curtis to focus on the main business, will react to the move.

St Barbara, Catalpa Resources, Wah Nam Holdings, Brockman Resources

Moving to the action in the resources sector, gold miner St Barbara has set its sights on becoming the second biggest local producer with its $350 million cash and scrip offer for Perth-based Catalpa Resources. The offer, which is subject to due diligence and needs Catalpa board's support, values Catalpa shares at $1.92, compared to the pre-offer closing price of $1.375. That's a 41 per cent premium but Catalpa's management has wisely told its shareholders to hold their horses and added that the unsolicited bid has been made at a time when its shares were underperforming. Timing is an issue here because St Barbara has reportedly been eyeing Catalpa for a while and has unsuccessfully approached the target's board last month. Catalpa has also opened the door to other suitors which again indicates that St Barbara's offer may not have completely impressed the target's register. The other point of concern is the rumblings from analysts that the deal may be dilutive for St Barbara in the short term. However, the miner's chief executive Tim Lehany seems confident for the moment telling The Australian that the $350 million offer has the support of his big shareholders but we will have to wait and see if there is any change in that position if another suitor decides to enter the race.

Meanwhile, Hong-Kong based Wah Nam Holdings has secured a controlling stake in iron-ore junior Brockman Resources and has also raised its stake in FerrAus. The victory over Brockman is a remarkable result for a Wah Nam which makes most of its money from running a limousine business in Hong Kong and has little or no mining experience. However, Brockman is unlikely to accept the outcome without a fight and could now intensify its efforts to bring regulatory scrutiny over the pattern of trading that has led to Wah Nam's victory. Let's just remember that acceptances from Australian and New Zealand shareholders account for just 0.12 per cent of shares on issue, with the rest coming out of Hong Kong and Singapore. The other thing to keep an eye on is whether the Brockman situation now influences the other target FerrAus to become more conducive to Wah Nam's $260 million offer.

Elsewhere, Gloucester Coal is all set to kick-start its capital raising to buy Donaldson Coal from its controlling shareholder Noble Group and the unlisted coal company Monash. According to The Australian, UBS and Citigroup are preparing to launch the $230 million raising at $9 a share with institutions expected to pick up the bulk of the shares. The $230 million figure is lower than the $400 million originally expected by the market but the papers adds that Gloucester is now paying a lot less for Monash.

Coles, Agrium, SunRice, Ebro Foods

Miners aren't the only ones making waves with a fair bit of M&A news coming out of the agribusiness sector. We start with Canadian fertiliser group Agrium which may be about to make life a bit difficult for Wesfarmers-owned Coles' plans to muscle in on Australia's largest lamb processor CRF. Coles was so far the only suitor in town for CRF but The Australian Financial Review reports that Agrium's Landmark business may now be willing to enter the fray, through its 50 per cent owned joint venture Regional Infrastructure Pty Limited (RIPL). It adds that Landmark's entry may be at the behest of CRF which has requested due diligence after finding out that Coles' offer was the only one on the table. Meanwhile, SunRice's largest shareholder Julian Menegazzo continues to rock the boat and make life difficult for Spanish suitor Ebro. While the Spanish food giant's $610 million offer has been accepted by most large shareholders and the rice marketing board, Menegazzo is still kicking up a storm and has now apparently commissioned a new report to challenge the earlier independent valuation report prepared by Lonergan Edwards. The Lonergan Edwards report said that the Ebro deal was fair value but the AFR reports that Menegazzo has hired Melbourne-based valuation group DMR Corporate, which has said that the current report undervalues SunRice by $100 million.

Wrapping up

Online retailers continue to attract big name investors with online shoe seller Style Tread the latest to figure in Nine Entertainment boss David Gyngell's ambitious digital media strategy. According to The Australian Financial Review, Nine Entertainment has taken a 20 per cent stake in Style Tread for an estimated $4 million. The move comes on the back of the launch of Nine's very own group buying site Cudo in August. Staying in the retail sector, Myer's boss Bernie Brookes has told Fairfax papers that the retailer is set to increase its direct outsourcing of goods from China to the tune of $200 million a year by 2016. Myer will reportedly open offices in Shanghai and Hong Kong to help co-ordinate the increase. Elsewhere, FEX Group has reportedly launched a takeover offer for a 74.8 per cent stake in the NSX, the owner of the National Stock Exchange. According to The Australian, the unlisted FEX, which has applied to operate a new futures market in energy derivatives, is offering 23.5 cents a share for NSX. FEX is 32 per cent owned by veteran futures trader Brian Price's Iron Mountain Entertainment group and its register includes mining heiress Angela Bennett's AMB Holdings. In other exchange related news, a $US3.6 billion counterbid by Canadian banks and pension funds has caught the London Stock Exchange on the hop with regards to its merger with the TMX Group. The Canadian consortium dubbed, Maple Group Acquisition Corp, includes the Alberta Investment Management Corporation, Caisse de depot et placement du Quebec, Canada Pension Plan Investment Board, CIBC Ontario Teachers' Pension Plan Board, Scotia Capital and TD Securities. Finally, there may be another bidder for Burrup Fertiliser's ammonia plant with the AFR reporting that Orascom Construction Industries is preparing to put an indicative offer on the table. OCI is a construction giant in the Middle East market and the third largest nitrogen fertiliser producer in the world.