BREAKFAST DEALS: Woodside ambition

Woodside flags a 'global' acquisition as it eyes cash from a Browse stake reduction, while Centro plans some bulky assets sales.

The ambitious expansion of Woodside Petroleum etched by former boss Don Voelte had some investors wondering if the oil and gas company was stretching itself a bit too much. New chief executive Peter Coleman has shown himself to be a careful operator, but that doesn’t mean he doesn’t have ambitions of his own – indeed, global ambitions. Meanwhile Centro Retail Australia is on a big asset sale drive, while APA Group says a higher bid could be coming for Hastings Diversified Utilities Fund. Elsewhere, Leighton Holdings could be getting rid of its waste management business, APN News & Media has got into a tussle outdoors and Ten Network’s share slide puts it into very tempting territory.

Woodside Petroleum

Woodside Petroleum chief executive Peter Coleman has flagged an acquisition of a "global” nature, something that could stamp his authority on the Australian oil and gas company. Investors are licking their lips over Woodside’s plan to sell down a sizable amount of its 50 per cent stake in the Browse LNG project, raising upwards of $1 billion. Reports indicate that PetroChina and China National Petroleum Corp have shown their interest with proposals reaching into the billions. Other existing shareholders in the project, BHP Billiton, Shell, Chevron and BP, are just some of other conceivable bidders.

With the Pluto project in Western Australia ready to start sending Woodside’s profits into orbit, some investors would have taken comfort from Coleman’s handling of the company’s ambitious growth promises, particularly given that they’ve watched the Woodside share price lose 14 per cent of its value over the last 12 months against a flat performance from rival Santos. But Australian oil and gas companies don’t have a solid history of international acquisitions.

Much of the share price weakness in Woodside can be attributed to Shell’s intention to exit its register. With that 24 per cent shareholding dragging down the stock price, Coleman could alternatively look to buy Shell out at what the UK energy giant considers the right price. Then again, Shell will look after itself and will find an exit somehow, Woodside must focus its attention on long-term shareholder value – let’s just hope Coleman chooses wisely.

Centro Retail Australia

Centro Retail Australia is reportedly set to offload $1.6 billion of its total value through asset sales. About $500 million in syndicate shopping centres have been sold in the past six months, but The Australian reports that another $1.1 billion in sales are set for the rest of this year, with four centres in exclusive due diligence with separate buyers already. Colliers International and Savills have picked up the work to run the sales process, though it remains unclear who they’re talking to.

One wonders whether Stockland managing director Matthew Quinn might get his Centro counterpart Steven Sewell on the phone to see if there’s anything he’s interested in that’s up for grabs. "There are a couple of centres that Centro own that would fit with our strategy, but as far as I’m aware they’re not for sale,” Quinn told Business Spectator less than a week ago. Maybe those assets weren’t up for sale, or maybe he was just trying to keep it under wraps.

APA Group, Hastings Diversified Utilities Fund

Tensions between pipeline operator APA Group and its target Hastings Diversified Utilities Fund appear to have eased with the suitor indicating that it could increase its $1.8 billion bid. APA says HDF’s refinancing efforts looks to have removed a key condition to its bid and that a better offer could be forthcoming. It’s an important breakthrough, as the HDF board has so far been unimpressed with the cash-and-scrip offer – 50 cents a share and 0.326 APA shares – which it considers too conditional and low-ball.

But before all of this, APA needs to get clearance from the competition regulator. The Australian Competition and Consumer Commission suspended its investigation into the deal to seek more information. The thought is that the ACCC might ask the pair to offload one of the pipelines before it signs off on the deal, hence there’s little point in APA upping the bid now if one of the assets is going to be prized from it.

Leighton Holdings

Construction giant Leighton Holdings is reportedly thinking about selling its waste management unit for up to $300 million after receiving unsolicited approaches. According to media reports, Leighton has hired JPMorgan to run the sales process for the unit, which is part of its Thiess arm. The Australian Financial Review suggests that interested parties could be SITA, a Suze Environment (France) and Sembcorp Industries (Singapore) joint venture, Ironbridge Capital, which owns EnviroWaste in New Zealand, and indeed other private equity players.

APN News & Media, Quadrant Private Equity

It seems things can get nasty when one ventures outdoors. Respected outdoor advertising veteran Pierce Cody has quit the board of APN News & Media, with a Fairfax report indicating he wrote to the company and its key stakeholders by email last night informing them that we has stepping down immediately due to "governance concerns”. APN apparently dismissed the accusation and said Cody departed out of frustration for not being appointed to the company’s planned $200 million outdoor joint venture with Quadrant Private Equity.

New Hope

Finally, some news out of New Hope Corp amid persistent whispers that the drawn out sales process has hit a snag. The Australian Financial Review believes that final binding offers have to be submitted by March 6, giving prospective suitors a little less than two weeks to show their hand. It’s been reported that the pool of bidders has shrunk noticeably with India’s Aditya Birla and a Korean consortium pulling out. However, encouragingly, the newspaper says sources close to the sale indicate that bidders are interested in the whole company, which is expected to go for upwards of $5 billion.

Ten Network

It was never thought that billionaire Gina Rinehart was investing in media for the money, but few thought it was going to be this unprofitable. Ten Network shares plunged 9.3 per cent to 78 cents. That’s their lowest levels in almost three years, down 43.9 per cent in just the last 12 months. Rinehart bought 10 per cent in Ten Network at an average price of $1.58 a share, or which about $80 million in value has disappeared.

While Rinehart is thought to be snapping up media shares for political clout and influence – she also famously owns a sizeable chunk of Fairfax – the only real possibility for a swift turnaround in Ten’s value is a takeover. Ten has been mentioned as a potential target for private equity and certainly matches the criteria that the sector has used lately – find downtrodden company; add premium and stir. Billabong International is finding that out as we speak.

PaperlinX

If yesterday’s report is correct, PaperlinX has now either day sat down with management expert and shareholder Andrew Price or is due to very soon. The company announced a sad set of numbers yesterday including a $60.9 million lost for the six months to December, far worse than the $10.2 million of red ink in the last corresponding period.

Price is the subject of Orbis Investment Management’s affections, and could spell the end of chairman Harry Boon if he ascends to the board. In the meantime, PaperlinX chief executive Toby Marchant has announced that asset sales as a way of getting liquidity up, while shareholders’ thoughts drift back to a failed takeover approach by what was said to be Platinum Equity.

Wrapping up

Murchison Metals and Chameleon Mining have filed their consent orders for their $25 million settlement, paving way for the Oakajee Port & Rail project deal with Japan’s Mitsubishi.

BHP Billiton picked up $US5.25 billion from the US bond market at a cheaper rate than Italy incidentally enough, although News Limited brings word from a source that it received more than $US11 billion in orders. In other news from the big miners overseas, Newcrest Mining share could be appearing on the Toronto Stock Exchange within a fortnight. Emerald Oil & Gas NL has picked up 10,500 lease acres in Williston Basin in North Dakota, US, from North Plains Energy.

The Australian Financial Review understands that Champ Private Equity won’t be going forward with a bid for VIP Petfoods, the exclusivity agreement has just expired. And finally, the Royal Bank of Scotland is tipped to confirm that CIMB Malaysia is the buyer of its Asia Pacific assets after global chief executive Stephen Hester updates the market on the sales process today (UK time).