BREAKFAST DEALS: Woodside's stoicism

Woodside chairman Michael Chaney plays it cool on whether the oil and gas producer was on takeover watch, while WA Premier Colin Barnett issues a warning to any prospective suitors. James Packer and Lachlan Murdoch muscle into Ten Network's boardroom and while the argy-bargy may have calmed down for now another flare-up could be on the cards. Elsewhere, Healthscope's new boss Robert Cooke lays out his game plan, Lynas scores another rare earth deal, private equity group Blackstone likes the look of Australia and Qantas cops a $12 million cartel fine.

Shell, Woodside

Woodside Petroleum chairman Michael Chaney was keeping his cool yesterday as the local oil and gas producer's shares plunged over 6 per cent after Royal Dutch Shell offloaded a $3.3 billion stake in the company at a discount. The move immediately sparked talks that Woodside was now firmly in the sights of interested suitors but Chaney was pretty circumspect on revealing whether the company has gone on to a war footing with regards to a defence. Chaney told a business lunch in Perth that Shell's sale did not put Woodside in play but his comments were tinged with a healthy dose of pragmatism. He conceded that suitors across the globe will naturally be interested in Woodside and given BHP Billiton's past interest in the company it was possible that the miner may make another pass. However, any takeover activity looks highly unlikely in the short term with many in the market pointing out that Shell would have probably sold its stake at a premium if a buyer was available rather than sell at a discount to domestic and international investors. There is a view that Woodside might be bit expensive at current price but Shell's remaining 24 per cent stake will be substantial overhang which is going to put pressure on Woodside's share performance. The other thing to keep in mind is the substantial political baggage that any takeover deal will bring. Woodside is now a lot more attractive to a number of suitors, including UK's BG Group, Brazil's Petrobras and Chinese heavyweights – PetroChina and CNOOC. However, any move from foreign players will undoubtedly open a can of worms. West Australian Premier Colin Barnett has wasted no time in warning foreign raiders to keep their hands off. Barnett was instrumental in scuttling Shell's designs on Woodside in 2001 and has even promised to oppose a full takeover by BHP. Political sabre rattling aside, Shell could probably sell its remaining stake in Woodside in the near future to BHP or a foreign player without ruffling too many feathers. For Woodside and Chaney their immediate task is securing a replacement for outgoing CEO Don Voelte, find a way to keep the expansion of its Pluto project on track and resolve the headaches with the development of Sunrise and Browse projects. While a takeover may not be imminent Woodside's management will have to tackle these challenges under the shadow of continued takeover speculation.

Ten, Packer, Seven Network

James Packer and Lachlan Murdoch have muscled their way into Ten Network Holdings' board after the network and its major shareholders called a truce. Packer and Murdoch seem to have dropped their demand for a third board seat for the time being in return for the swift departure of executive chairman Nick Falloon who will leave next month immediately after the network's annual general meeting. While the peace deal brings the bickering between the media moguls and the network at an end for now, it may only be temporary breather before another bout of argy bargy. Packer was pretty keen on getting Seek's Paul Bassat a seat at the table and The Australian Financial Review suggest that he may not have entirely given up on that goal. Then there is the issue of finding a replacement for Falloon and while a temporary candidate seems to be a logical situation for now there is a good chance that Murdoch, who has stepped down as the deputy chairman of Prime Media Group, will have his eyes on the job. The presence of the media scions has already piqued the interest of regulators and that may intensify as the federal government unveils its anti-siphoning rules. These factors could well prove to be a flashpoint for more acrimony ahead. Meanwhile, the AFR names David Gordon, Dean Hawkins, Brian Long and Christine Holgate as possible successors to Falloon.

Healthscope

Private hospital operator Healthscope's incoming CEO Robert Cooke may have been out of the picture since he sold Symbion to Primary Healthcare in 2008 but the veteran healthcare man seems to have a card up his sleeve as he gets set to lead Healthscope under the auspices of its new private equity owners – TPG and Carlyle Group. Cooke told The Australian Financial Review that he saw opportunities in brownfields and some greenfields developments. He is especially upbeat about the prospects of expanding Healthscope's pathology business and told the paper that the company would keep its eyes open for acquisitions in that space. Cooke's upbeat talk on pathology backs up speculation in the market that Cooke and Primary's Ed Bateman may cross paths again with Primary's struggling pathology unit an attractive target for Healthscope. Private equity company Ironbridge Capital which once owned Healthbridge's pathology arm and for which Cooke is a non-executive chairman, has also been touted as a likely target. Cooke will relinquish his role at Healthbridge before starting at Healthscope.

Lynas, Xstrata, Equinox Minerals

The hoop-la around China's grip on the global supply of rare-earth exports continues to generate interest in the sector and Australia's leading player in the field Lynas Corp has sealed another long-term contract with an unnamed European customer. The news comes on the heels of the deal Lynas signed with a Japanese customer in September and gave Lynas' shares a boost. Lynas is certainly making the most of the recent concerns about China's domination of the rare-earth market and with the miner's Mount Weld project in Western Australia the first new rare-earths project into production outside China Lynas stock has been trading like hotcakes. However, there is ample reason for caution given that the global push for alternative supplies and the rush by miners to bring production online to make the most of higher prices may be leading to the creation of a classic commodities bubble. In other mining news, Xstrata's boss Peter Freyberg wasn't mincing his words yesterday when it came to what he thought of rival Sin-Tang Development's moves on target Sphere Minerals, telling The Australian that Sin-Tang's moves have been frustrating but the target's main shareholders were beginning to see the light. Freyberg said that his $514 million deal was final and Sphere was not a "must have” asset for his company. Elsewhere, Canada's First Quantum Minerals has announced plans to sell its 16 per cent stake in Equinox Minerals for more than $688 million. First Quantum, which is currently working on the Ravensthorpe Nickel project in Western Australia, said it intends to use the funds to develop its growth projects. First Quantum used the services of RBC Capital Markets and BMO Capital Markets to find buyers for the stake. First Quantum bought into Equinox in 2007 when its shares were sitting at around $C4.75 cents they have since risen some 35 per cent, so a handsome profit here for First Quantum which at one time was seen in the market as a potential suitor for Equinox. Equinox you may remember hit the headlines this October when it launched a $1.2 billion bid for Saudi Arabian-focused Citadel Resource Group. Meanwhile, the argy bargy between Mount Gibson and its main shareholders – APAC Resources and Fushan International Energy Group – has forced the iron ore miner's chairman Neil Hamilton to step down. Mount Gibson has informed the market that Hamilton will call it quits at the company's annual general meeting next week after APAC and Fushan both demanded that Mount Gibson's board is cut down to size. Elsewhere, OZ Minerals has nabbed BP Australia's chief financial officer Rebecca McGrath to serve as a non-executive director.

Wrapping up

As if Qantas didn't have enough trouble keeping the engines of its A380 fleet clean, the national carrier has now flown into trouble with European competition regulators. Qantas is one of the 11 carriers facing a hefty fine imposed by EU regulators for running an air-cargo cartel. Qantas has copped a $12 million fine for its participation in the price-fixing which is a lot less than what its peers will have to pay. The Air France-KLM group is set to pay $427.26 million, with Air France paying $252.22 million and KLM footing the remaining $175.04 million. British Airways was fined $143.34 million. Qantas may have gotten away lightly here but it's probably the last thing Qantas boss Alan Joyce wants to deal with right now. Meanwhile, private equity powerhouse Blackstone Group seems to have taken a liking to Australia, with group president Tony James telling the AFR that the company had $15 billion in equity capital that could be leveraged up to about $50 billion in funds for investment in opportunities in Australia. James said that Blackstone's private equity, property and credit markets division are keen to be active in the local market and the group was working on three or four private equity transactions at the moment. The local dairy industry is abuzz with excitement with reports that Warrnambool Cheese & Butter is set to welcome Bega Cheese onto it's register through a $17.4 million placement at $2.90 a share. Warrnambool knocked back two takeover offers pitched at $4.40 a share earlier this year and it looks Bega could take a 15 per cent stake after the two companies negotiated a two-part capital raising worth up to $36.7 million. According to The Sydney Morning Herald, the move should provide Warrnambool a modicum of comfort against any further acquisitive activity with Bega's neat blocking stake likely to prevent any future unwelcome action from rivals. Leighton Holdings' German parent Hochtief has launched an appeal against the Takeovers Panel decision to not to intervene in the tussle between Hochtief and ACS.