DataRoom AM: A meaty takeover

A $1bn takeover play for Primo Smallgoods could be stewing, while Pacific Brands is closer to walking away from its Brand Collective division.

As the global population continues to swell, investments in the food sector are starting to draw much greater attention, with the latest activity on the local scene the potential $1 billion sale of a big name meat producer.

Elsewhere, Pacific Brands progresses its asset sales agenda, an LVMH subsidiary puts the microscope on Aussie swimwear brand Seafolly and the IPO market continues to hum along ahead of the Christmas holidays.

The world’s largest food processor has its eyes on the Australian meat industry, teeing up a $1 billion play for bacon and salami producer Primo Smallgoods. It is believed that Brazil’s JBS is gauging the interest of both Affinity Equity Partners, which owns 70 per cent, and the founding Lederer family, which retains 30 per cent in the 30-year-old business.

However, there is also the prospect of a float as Affinity looks to secure a handsome profit on its recent entry into the business, with its 2011 purchase of a 70 per cent stake then valuing the firm at $740 million.

Meanwhile, Pacific Brands has made progress on the sale of its Brand Collective division, potentially breaking up the operation via a sale to multiple buyers. The deals for Brand Collective, a footwear and licensed brands operation that houses the Volley and Hush Puppies brands, could be signed this week, according to The Australian Financial Review, with Macquarie Capital advising on the sales.

There is also speculation that PacBrands may again become a takeover target as a major private equity name in the US reportedly runs the numbers.

Also in retail, LCapital, the Asian-based private equity firm of upscale brand owner LVMH, is in discussions over the potential acquisition of local swimwear group Seafolly. According to the AFR, a deal could be secured with the founding Halas family by the end of the year, but a likely price has not been disclosed.

In the IPO market, SurfStitch is kicking off an institutional roadshow this week ahead of its planned December 16 listing. Leading stockholders in the online surfwear retailer are tipped to retain much of the $300m business, with just $100m worth of stock likely to be offered through the float.

Elsewhere, investment bankers are lining up for a position at the table as tech firm Wisetech Global preps for a 2015 listing. Credit Suisse, UBS, Morgan Stanley and Macquarie Capital are putting their hands up for an advisory role to the $1bn float, with Credit Suisse seen as the frontrunner.

In finance, the $1bn race for the Australasian consumer lending business of GE Capital has taken a minor turn as NZ-based Heartland Bank pushes for a split of the business so it can claim control of the NZ operations. The development brings into play a possible joint bid as Macquarie Group and Wesfarmers headline a long list of prospective buyers.

Finally, talk continues to swirl around the prospect of a $2bn bid for Brambles spinoff Recall from long-time suitor Iron Mountain in the coming 12 months, while Palisade Investment Partners has joined the list of shortlisted parties for the $1bn Royal North Shore Hospital in Sydney, though AMP remains the frontrunner on the deal.

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