BREAKFAST DEALS: Young king coal

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Thirty-three-year-old Nathan Tinkler expands his empire with the purchase of Rio Tinto's Maules Creek project but Gen-Y hotshot Nick Bolton isn't looking so gleeful after the Takeovers Panel refuses to review a decision that scuttles his plans for Multiplex Prime.

Rio Tinto coal sale

Rio Tinto subsidiary Coal & Allied has sold its Maules Creek project in the Gunnedah Basin to millionaire investor Nathan Tinkler for $480 million. The 398 million tonne open-cut resource is the first in a series of acquisitions for Tinkler's private company, Aston Resources, the 33-year-old former mining electrician said. Tinkler is best known for flipping the Middlemount coal deposit in Queensland to Macarthur Coal two years ago for a cool $245 million profit. After selling the asset he bought a year earlier to Macarthur for a combination of cash and scrip, he subsequently sold his shares in the company the next year for $440 million. Tinkler has since largely focussed on his other love – thoroughbred racing – where he has invested $150 million in his Patinack Farm facility, located in the Hunter Valley where his career in the coal industry first began. Aston is expected to announce further deals in the next two months and is likely to announce a mining licence over its 70 per cent owned Dingo coal project in Queensland's Bowen Basin. Aston acquired its interest from a $9 million deal with junior Cockatoo Coal earlier this year.

Multiplex Prime Property Fund

Another young entrepreneur is meanwhile threatening legal action against Multiplex Prime Property Fund in what looks to be the most colourful battle since, well, Brisconnections. Six years and a world away from Nathan Tinkler, 27-year-old Briscon greenmailer Nicholas Bolton is not giving up the fight to avoid paying a $22 million second share instalment on his equity in Multiplex Prime after the Takeovers Panel refused to review an earlier ruling that stymied what was in effect a $700,000 takeover bid by Bolton. The plan was similar in what Bolton intended to do with Brisconnections: identify a heavily discounted infrastructure or property company with a partly-paid instalment share structure, buy up a significant stake for cents on the dollar and then attempt to lock in the bargain by taking the thing over or winding it up before the next instalment was due. The Brisconnections play failed because the toll-road trust's management and underwriter Macquarie Group managed to survive a wind-up motion and effectively recapitalise the share registry upon the arrival of the second instalment. In a twist, Bolton played no small part in that – agreeing at the eleventh hour to vote against the wind-up in exchange for a $4.5 million payment by Leighton Holdings, the toll-road's developer, earning him that greenmailer soubriquet. Bolton hasn't, of course, gotten that far yet with Multiplex Prime, but should his threats of legal action fail to materialise or succeed; the $22 million in liabilities he effectively owes on his holding could prove his comeuppance – at least in the view of disgruntled Briscon unit-holders who originally saw him as a white knight in Gen-Y form. Germane to all this is Grocon's decision to back down from its own plans to take over the management of Multiplex Prime and release unit-holders from their instalment obligations. Grocon, run by construction industry scion Daniel Grollo, launched a $109 million joint proposal to Multiplex Prime in partnership with US private equity group Oaktree Capital Management. Needless to say, that offer was a little more generous than Bolton's efforts. The Takeovers Panel nevertheless has effectively ruled that Multiplex Prime's present management, Brookfield Multiplex, is within its rights to raise $50 million via a highly dilutive capital restructure that Bolton has described, perhaps with an almost mystic sense of unreality, as a 'takeover by stealth'.

Babcock and Brown Infrastructure

And just as the travails of Multiplex Prime represent the post-credit crunch failure of boom-time listed property trust models, the slow death of Babcock and Brown Infrastructure illustrates what happens when investment bankers take over businesses like ports and railways. Corporate governance consultancy RiskMetrics has recommended that shareholders in BBI vote against the resolution of an executive pay increase and the re-election of two directors at the company's AGM in little over two weeks. The 27 per cent pay rise and the candidacy of Barry Upson and Leigh Hall comes after BBI was forced into a $1.5 billion recapitalisation. CGI Glass Lewis, a rival institutional shareholder adviser, has however recommended that investors vote with the board on both matters so that the focus isn't taken off that recapitalisation, which – perhaps unsurprisingly for observers of this fascinating post-crunch world – involves Brookfield Asset Management becoming a cornerstone investor as well as the owner of 49.5 per cent of BBI's flagship Dalrymple Bay Coal Terminal. The recapitalisation deal will see BBI's management internalised, its name revert to Prime Infrastructure and debt reduced from $8.8 billion to $3.8 billion.

BKK Partners

Over to manoeuvres of a different kind, former Federal Treasurer Peter Costello has been named a director at new investment bank BKK Partners, which was founded by mate and ex-Goldman Sachs JBWere managing director Alastair Walton. The advisory firm, which also features other GSJBW alumni including Andrew Stuart and John Anderson, has not disclosed what it will pay Costello, who once vocally criticised the industry over its high salaries and incentive schemes. Either way it's a clever move for the ex-pollie and new Future Fund director, who refused to respond to his appointment to the latter, saying: "If someone says to me would I like to serve on the Future Fund, what can I say - 'I don't like the bloke who set it up?' " With most indicators pointing to a bumper year in merger and acquisition activity, the corporate advisory sector is set to continue its dream run. Perhaps former Prime Minister Paul Keating, himself a former chairman of investment bank Lazard Carnegie Wylie (now Lazard Australia) was a little unfair when he called Costello "thallium: a slow-acting dope''.

Wrapping up

Woodside Petroleum has raised $US700 million on the United States private placement bond market, adding to the oil group's coffers after the $US721.5 million sale of its share in the Otway gas project to Origin Energy earlier this week. Elsewhere in oil and gas, ExxonMobil Corporation has struck a preliminary deal to sell China's Sinopec Corporation 2 million tonnes of liquified natural gas a year from Papua New Guinea. Exxon is extracting the gas with minority partners Oil Search (34 per cent), Santos (17.7 per cent), Nippon Oil, Minerals Resources Development Company and Eda Oil. Exxon could meanwhile be facing a rival bid for the Jubilee field off the coast of Ghana, Reuters reports. Exxon is offering current owner Kosmos Energy $US4 billion for the asset, but state-run Ghana National Petroleum Corporation could trump that move. Kosmos is backed by private equity firms Blackstone Group and Warburg Pincus. Exxon had already beaten off rival bids from a variety of firms including the China National Offshore Oil Corporation. In Deals TV later today we'll be looking at reports on Retail Apparel Group, Transurban and Regis Resources. There's also some interesting developments overseas between Panasonic and Sanyo, CF Industries and Terra, plus Berkshire Hathaway and Burlington Northern Sante Fe.