BREAKFAST DEALS

Could Bank of Queensland buy Suncorp the bank and could Suncorp the insurer buy Aviva Australia? Could Computershare raise equity capital and could ANZ be about to issue some retail bonds? Read on to find out more, plus other stories this morning including Canwest's miraculous balance sheet healing and possible sales for Santos.

Bank of Queensland/Suncorp-Metway

More reports are emerging of the likelihood of a merger between Bank of Queensland and the banking assets of Suncorp-Metway. Such a merger, which could create a Brisbane-based lender roughly the size of the former St George, could also signal a change in the Australian insurance landscape, if it forces the rapid spin-off of Suncorp's insurance division. It has already been rumoured that Aviva, the former Norwich Union, could sell its Australian division for up to $1 billion. Would the market be able to stomach the acquisition of another insurance company? Or maybe the acquirer could be Suncorp. The bancassurer is looking for a new chief executive with insurance experience, suggesting that the remaining entity, sans bank, will be focussed on just that.

Aviva

Returning to Aviva, the world's fifth largest insurer, the AFR is speculating that National Australia Bank may be interested in its Australian operations, in addition to the more commonly named parties, AXA Asia Pacific and AMP. Word is that NAB is being advised by Goldman Sachs JBWere, which underwrote the bank's $3 billion institutional placement in November along with UBS and Merrill Lynch. Meanwhile it is JPMorgan and Morgan Stanley, two firms with storied histories, which are advising Aviva, a company that traces its roots to a meeting at Tom's Coffee House in London, 1696.

Macquarie Group

Macquarie meanwhile has its sights set on other deals in the global insurance game, reportedly entering into a joint bid with India's Religare Enterprises for AIG Investments. The fund management unit of the troubled American International Group is being bid for $US500 million, The Times of India has reported, and has assets under management of $US100 billion. The silver doughnut is meanwhile keeping itself busy in US funds management, planning a second real estate investment trust with partners CNL Financial Group of Florida. In what could be the epitome of contrarian thinking, the pair plan to raise $US1.5 billion to invest in shopping centres, office buildings, property loans and real estate equities.

Macquarie Airports

It may be growing in some areas, but Macquarie has bowed to public pressure and agreed to sell its 19.9 per cent holding in Japan Airport Terminal, which is building a fourth runway at Haneda, the Tokyo International Airport. MAP expects to earn $260 million from the sale, including hedging arrangements, versus the stake's $280 million book value as at December 31.

National Foods

Elsewhere, Japanese brewer Kirin Holdings is trimming its National Foods subsidiary through the sale of various dairy manufacturing assets to Italian-owned Parmalat Food Products for some $70 million. The assets, picked-up with the $910 million acquisition of Dairy Farmers in August, include the Lidcombe and Clarence Gardens manufacturing facilities and various branding licences and distribution networks in NSW, South Australia and the ACT.

Ten Network Holdings

Canwest Global Communications has secured a $C175 million lifeline, giving it and its 56.6 per cent subsidiary Ten Network Holdings some breathing space as the Canadian company attempts to sell down assets to pare back unsustainable gearing. After deafening silence as the beleaguered Manitoba-based media group passed a refinancing deadline yesterday, the firm revealed the deal with its creditors early this morning, some time between Ten's screening of late-night classics Home Shopping and This is Your Day with Benny Hinn. It was indeed a moment worthy of Benny Hinn – the American faith healer known for his collection of tailored Nehru suits – when Canwest rose from the proverbial wheelchair with $C100 million of senior secured notes plus an additional $C75 million credit facility. The funds will allow the firm to pay down debts due immediately, including a $US30.4 million missed interest payment.

Computershare/Australia and New Zealand Banking Corporation

Market services firm Computershare is seen as yet another capital raising candidate, according to broker Credit Suisse and the AFR. The share registry group could potentially use the money for further acquisitions in the bear market, the Fin said. And ANZ is meanwhile not ruled out as a capital raiser, though one observer suggests that there are more paths to tier 1 capital than mere capital raisings. Bank of New Zealand showed one such way on Tuesday with a Tier 1 hybrid offering to raise $NZ150 million from kiwi retail and wholesale investors. ANZ's debt capital team has plenty of experience and recently led the first retail bond offer in Australia for many years on behalf of Tabcorp. It stands to reason that such skills shouldn't go to waste.

Santos

Four of Santos's gas projects in the Bonaparte Basin off Darwin may be up for sale, according to the AFR. Shell, ConocoPhillips, Inpex and Eni, which operate in the basin, plus several unknown Chinese parties are likely to look at the assets, thought to be worth several hundred million dollars, the Fin said. Citigroup is said to be advising Santos, following the advisory mandate it earned when the company partnered with Malaysia's Petronas on its Gladstone LNG project. Santos has made no announcement to the exchange.

Petsec Energy

Elsewhere in oil and gas, Petsec Energy, a Sydney-based independent with a focus on the Gulf of Mexico and offshore China, has flagged acquisitions in the coming years. Speaking to shareholders, chairman and CEO Terry Fern said that acquisition targets would be under $100 million, "funded in large part by our baning facilities, underwritten by hedging."

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