D-Day for Incitec Pivot

It is getting close to D-Day for Incitec Pivot and its advisors after its would-be takeover target, explosives group Dyno Nobel, finally released an update on the status of its Moranbah ammonia nitrate project.

The news from Dyno was not good, announcing that it had suspended the project because of cost over-runs – an apparent victim of the lack of available engineering talent, project management and labour for major constructions - and a reappraisal of its potential returns. It has already ploughed $260 million into the project.

Incitec snapped up a 13 per cent stake in Dyno in August through Citi, and has been hinting at a possible bid ever since, although it has always said it was awaiting the outcome of the Moranbah review.

Incitec is using the recently formed boutique advisory firm O'Sullivan Pullini to act as its lead advisor. It marks the first major public corporate mandate for Tony Sullivan and David Pullini since they founded their firm in 2005, though they have been busy acting for private equity clients, including Kohlberg Kravis Roberts & Co. Last year, the firm advised KKR on its $1.8 billion buyout of the industrial waste division of Pullini's former employer, Brambles Industries.

Dyno is using Macquarie Bank and Credit Suisse. Macquarie's Robin Bishop has just finished working on Wesfarmers' $20 billion takeover of Coles and was the architect of Orica's purchase of Dyno Nobel ASA from Industri Kapital for $1.7 billion, which included Macquarie and friends taking the Australian business to help Orica sidestep regulatory problems and later refloating those assets on the ASX. The exercise is said by analysts to have netted Macquarie some $250 million in fees and profits from its principal investment.

The Credit Suisse team is being led by Rob Stewart and Max Billingham.