BREAKFAST DEALS: Woodside auction

Woodside is reportedly set to offload most of its Browse stake, while things heat up around Nine and CVC.

Woodside Petroleum chief executive Peter Coleman is learning quickly that liquefied natural gas in Australia is best shared around. Woodside has taken the foot off the accelerator on a few projects lately and now the oil and gas company has reportedly started an auction process for most of its Browse gas project in Western Australia. A range of companies from home and abroad are thought to be likely buyers in this increasingly heated space. Meanwhile, it looks like CVC Asia Pacific has turned down a chance to talk to two US hedge funds about the enormous debt burden of Nine Entertainment – debt that is now almost 50 per cent owned by the hedge funds. Elsewhere, MSF Sugar chief executive Mike Barry has had to hang around a little longer than planned, synergies from the Whitehaven Coal-Aston Resources merger are looking better and better, and Amcor is shaping up as the winner of flexible packaging company Aperio.

Woodside Petroleum

Woodside Petroleum is reportedly auctioning off the majority of its 50 per cent stake in the Browse gas project in a deal that could raise upwards of $1 billion. The Australian understands that Woodside may reduce its stake from 50 per cent to 16.67 per cent, a structure reminiscent of the North West Shelf liquefied natural gas project. The paper says that indicative bids have been put in, but the sale process could take some time. We’re talking months.

The remaining 50 per cent of Browse is currently shared by BHP Billiton, Shell, Chevron and BP. All could be interested in taking a bigger slice, although only Shell has seriously indicated expanding its footprint in this space. France’s Total SA made it very clear less than two weeks ago that it’s very interested in Australian gas, while Woodside’s North West Shelf partners, Mitsubishi and Mitsui, are also thought to be potential buyers.

Nine Entertainment, CVC Asia Pacific

Things appeared to go quiet over Christmas between CVC Asia Pacific and hedge funds stalking the debt burden of its prized possession, Nine Entertainment – or so they appeared to. News Limited brings word from a person familiar with the situation who says the US-based hedge funds Apollo Global and Oaktree Capital have seized almost 50 per cent of Nine’s $2.7 billion debt burden. The pair also apparently wrote a letter to CVC in late December requesting a meeting over the situation. CVC declined.

MSF Sugar, Mitr Phol

Maryborough Sugar Factory (MSF Sugar) announced in November last year that chief executive Mike Barry would be staying on until January 31 to make sure the $309 million takeover from Thailand’s Mitr Phol went as smoothly as possible. Now Barry has had his contract extended until the outcome of the takeover is "finalised”. That could be February 10, when the $4.45-a-share offer is scheduled to close.

For all the enthusiastic bidding for Australian sugar assets, MSF’s conversion is taking its time. On December 8, Mitr Phol had 22 per cent of the register and unanimous endorsement from the target’s board. When they last checked in on Monday, that stake had risen to just 28.64 per cent. An extension might be in order.

Rio Tinto, Ivanhoe Mines

It’s long been thought that Rio Tinto was only interested in Canada’s Ivanhoe Mines for the Oyu Tolgoi copper-gold project in Mongolia and little else. Now it appears that Rio has told its majority-owned Canadian partner exactly that. Fairfax believes Rio informed Ivanhoe founder and chief executive Robert Frieland that its long-term interests are only with Oyu Tolgoi.

This throws into question what Rio will try to do with the rest of the assets. The global miner is already in the grips of a massive divestment of its aluminium assets; now we could be looking at that 59 per cent stake in ASX-listed Ivanhoe Australia, and a gold asset in Kazakhstan, along with a few coal interests in Mongolia.

Whitehaven Coal, Aston Resources, Boardwalk Resources

Earlier this month, CLSA analyst James Stewart estimated that Whitehaven Coal and Aston Resources would generate about $259 million in cost savings from their proposed $5.1 billion merger. It appears Whitehaven boss Tony Haggarty is a little more ambitious. Deutsche Bank has estimated the savings to be closer to $500 million and when asked by The Australian Financial Review whether such a number was likely, Haggarty said he expects something "of that order”. The one thing that Stewart added, however, is that the compensation set aside for Boardwalk Resources, Nathan Tinkler’s unlisted company, is way overdone.

Amcor, Aperio Group

Australian packaging giant Amcor is reportedly in the box seat to get flexible packaging business Aperio for something around $300 million. You might remember that Pact Group, the company of late packaging billionaire Richard Pratt’s son-in-law, Raphael Geminder, was also in the running, with a few other players also linked to the sale. The Australian Financial Review believes that only Amcor and Pact have put in formal bids and its appears the former is the one poised to win.

Wrapping up

Expect another episode of interest from Asia in Australian coal assets, this time in the Wilkie Creek coal mine, which is in south-east Queensland. Wilkie Creek was won by Peabody Energy as part of its takeover of Macarthur Coal last year, but the energy giant has hired UBS to offload this particular mine. Peabody said the decision to sell Wilkie Creek was taken in the last quarter of 2011.

Atlas Iron chief executive David Flanagan celebrated Australia Day by declaring that his company is not for sale. Speculation has stirred from time to time that BHP Billiton is considering a run at Atlas and that Flanagan’s job is now to prepare the company for sale. But the mid-tier miner’s boss has put an end to the second suggestion.

Things are a little more eventful at Phillips River Mining, which agreed to a scrip-based takeover from Silver Lake Resources. Phillips River shares shot up 45 per cent to close at 29 cents a pop after Silver Lake offered 0.0882 of its own shares for each of the target’s shares, giving it a total value of around $20 million.

Elsewhere, Kresta might have to deal with some awkward situations in the near future. The window furnishings company reportedly has a 19.9 per cent stake on its register associated with one of its largest suppliers, Indonesian businessman Hardjanto Siswandjo, Fairfax reports.

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