CBD

The former Babcock & Brown helmsmen Jim Babcock and Phil Green (aka Babcock & Green) seem to have clinched their biggest deal since the multi-billion dollar implosion of the investment firm.

And like some of their previous ventures, it involves dogs. Australia's largest veterinary company, Greencross Limited, announced yesterday that it had made a "binding heads of agreement" to buy Babtec Holdings, the vet business part-owned by Babcock & Green.

The deal will increase the national total of pet clinics owned by Greencross, a listed group based in Queensland, from 44 to 58.

The managing director of Greencross, Glen Richards, said the parties were still in talks and declined to say what the deal was worth. However, it is believed it could result in Babtec taking a minority stake in Greencross and could mark Babcock & Green's return to the publicly listed environment (unless they offload their stakes).

"They have healthy animal hospitals, and Greencross appreciate the assets that Babtec have pulled together over the last few years," Richards said.

"It's going to be EPS [earnings per share] accretive."

Richards founded the business in 1994 when he was working as a vet in Townsville.

ANIMAL CLAN

Based on a recent presentation by Greencross, the pet sector seems to be performing a lot better than childcare.

Greencross, which recently reported a half-year $2 million net profit, highlighted statistics that showed 80 per cent of dog and cat owners thought their pets "as important as any other member of family".

Aside from Babcock & Green, Babtec's other key shareholders include one of the mega-rich Liberman family's offspring, Helen Abeles, and her husband Michael Abeles, and the former Hoyts boss Peter Ivany. Ivany's right-hand man, Colin Resnick, is a director of Babtec, as is Green and his stepson, Paul Platus.

James Garrett, the former managing director of the collapsed Elderslie Finance (once chaired by John Hewson), is another Babtec shareholder, along with the former Babcock & Browner Martin Greenberg. The Higginbotham family, the clan that established the radio station 2TM in Tamworth, also has a stake.

Greencross's list of top 20 shareholders include its former company secretary Craig Chapman. Chapman is best remembered in corporate circles as the former MFS chief executive who was appointed when the entrepreneur Chris Scott led the revolt of his white-shoe brigade against the board of the floundering Gold Coast firm. That led to the dumping of its chairman and former Liberal leader Andrew Peacock. Chapman stayed on to help the liquidators sift through the MFS wreckage.

Another big Greencross shareholder is Stuart James, the former Colonial executive and former chief executive of the hospital operator Mayne Group. Perhaps James, who is also a director of Greencross, thinks there is more money to be made out of four-legged animals.

James is also chairman of the market dog Pulse Health, which was once chaired by another former Liberal leader, John Hewson.

LATE DOUBTS

North Queensland can sometimes lag behind other parts of Australia. Especially during the daylight saving months.

The Tony Hartnell-chaired builder CEC Group (aka Cairns Earthmoving Contractors) finally coughed up its half-year accounts yesterday, more than two weeks late.

A month after boasting its fortunes were "starting to turn" after it made a $25 million property sale, the firm has reported an impressive $12.5 million half-year loss and admitted to some errors in its 2009 accounts. It had apparently overstated some numbers.

CEC's auditor, KPMG, also raised concern about the firm's net liabilities exceeding its assets by $45.3 million and noted the "material uncertainty" about the group's ability to continue as a going concern.

Apart from that, all appears ship-shape. Last month CEC's chief executive, Roy Lavis, said: "It certainly has not been an easy road, but the one thing we are is tenacious."

The only other nagging issue facing CEC, which counts the former federal politician Warren Entsch as a director, is its $88.8 million "multi-option" bank facility that has to be renegotiated by mid-September. It has to reduce the facility by $25.3 million by the end of this month.

CEC shares are expected to resume trading this morning after being suspended for the past two weeks.

FRIENDS AGAIN

Rio Tinto seems to have sorted out any of the lingering tensions it had with the Chinese government over the miner's failed deal with Chinalco last year. Despite some Rio operatives still enjoying the hospitality of the Chinese prison authorities, the miner confirmed plans to enter into a new venture with Chinalco to develop an iron ore field in Africa.

"An objective for 2010, and one that I am particularly focused on, is to strengthen our relationship with China," said the chief executive, Tom Albanese, in Rio's annual report, which published yesterday.

The Chinese-fuelled rebound in commodity prices seems to have helped ease any bad feelings from last year's failed Chinalco deal. Especially in the pay stakes.

The Rio report shows Albanese enjoyed a modest lift in total remuneration last year from $US2.1 million ($2.3 million) to $US9 million.

The main kicker appeared to be the recovery of Rio's share price from financial crisis lows. That enabled Albanese to reap $US3.9 million in share payments under Rio's Mining Companies Comparative Plan (MCCP). But Albanese still has a little way to go to get back to the pay of pre-crisis days - $US12.6 million in 2008.

Other happy Rio executives appear to be the head of its aluminium division, Dick Evans, whose remuneration leapt from $US4.4 million to $US14.1 million, and its iron ore boss, Sam Walsh, whose total pay rose from $US137,000 to $US6.26 million. Like other senior Rio executives, Walsh had to cop his share payments under the MCCP going into negative territory the previous year.

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