DataRoom AM: AGL staying power

AGL Energy and the NSW government received the news they feared from the ACCC yesterday, with the competition regulator blocking AGL’s purchase of Macquarie Generation. However, the final chapter in the story is likely yet to be written.

Elsewhere, Glencore Xstrata details plans for local deals with BHP Billiton and Rio Tinto, the Victorian government places the nation’s busiest port on the market and more doubts are cast over the strength of the IPO market.

AGL Energy’s $1.5 billion purchase of Macquarie Generation has hit a major roadblock after the competition regulator stepped in to block the deal. It leaves the New South Wales government hanging onto an asset it no longer wants for a while longer as no other bidders have tempted the state.

It is likely, however, that AGL will fight the Australian Competition and Consumer Commission’s decision in court as the energy sector seeks consolidation in a market hit by falling electricity demand. Such a move has precedent, with AGL winning a case against the ACCC in 2003 to claim a stake in the Loy Yang A power station.

Glencore Xstrata has thrown its hat in the ring for BHP Billiton’s Nickel West assets in Western Australia, with boss Ivan Glasenberg saying he will “kick the tires” on a deal. The assets align nicely with Glencore’s nearby Murrin Murrin project. BHP isn’t the only Australian mining behemoth Glencore wants to engage, however, with Glasenberg adding that the firm remained in talks with Rio Tinto over a coalmining joint venture in the Hunter Valley that would see mines and infrastructure shared.

There was no fresh news on the Tampakan project in Indonesia, which is being developed with ASX-listed Indophil Resources. Indophil said in late January that Glencore was looking for the exit door, but the project’s developer, Sagittarius Mines, has since rebuked that assertion.

The Victorian government has put the Port of Melbourne up for auction, in a move that should bring at least $6bn into state government coffers. The opposition has proposed the sale of Australia’s busiest port if it wins this November’s election, but the coalition government ended the suspense by telling the Herald Sun it had now developed its own “road map to privatisation”. The sale will be tied to plans to build a new port in Hastings should the coalition retain office.

APA Group’s $2.1bn takeover proposal for South Australia-based Envestra is up in the air after two directors told shareholders to vote down the deal. The news puts the deal in doubt as the directors work for 17.5 per cent shareholder Cheung Kong Infrastructure, which appears likely to use its stake to block an agreement.

A float of Yuma Energy in Australia has been put on hold as the company turns its focus to a backdoor listing on the New York Stock Exchange after buying out Pyramid Oil. The company hired Deutsche Bank in October to test the waters on a $150 million IPO on the ASX.

The news comes as the first significant listing on the ASX failed to flatter, with SG Fleet slumping 8 per cent in its first day on the market yesterday. Only finance, tech and healthcare IPOs are drawing the respect of investors at the moment.

It hasn’t deterred companies from weighing up IPOs, however, with Beacon Lighting among the many firms mulling a 2014 float. According to The Australian Financial Review, Beacon has begun an investor roadshow ahead of a planned $150m listing on April 15, with Morgans serving as lead advisor.