DataRoom AM: Aquila fizzle

Aquila Resources shareholders have a bitter pill to swallow, while UGL reportedly gets a decent price for its property services arm.

The chase for control of Aquila Resources has taken a major twist as Baosteel declared its first bid its final offer. It leaves the prospect of a takeover as a remote possibility.

Elsewhere, UGL is ready to complete the divestment of its property services arm, the sale of David Jones appears to be heading towards a simple conclusion and Coca-Cola Amatil may be ripe for a takeover.

There was bad news on Friday for investors counting on a sweetened offer for Aquila Resources from Baosteel and Aurizon, as the joint bid announced its $3.40 a share bid ‘final’ and said there would be no extension to the offer period beyond July 11. It’s a bitter pill for investors who drove Aquila stock beyond $3.60 a share in anticipation of a higher offer, with stock in the firm slumping over 12 per cent to $3.10 on Friday. The 30c gap between the offer price and the current price is a tacit acknowledgment the takeover has little hope of being sealed.

The news comes after Mineral Resources purchased a 12.78 per cent stake in Aquila at $3.75 a share last week to ensure it will at a part of discussions over the development of the $7 billion West Pilbara iron ore project. But with Baosteel now considering a complete exit (it has a 20 per cent stake) and iron ore prices sinking, doubts about the flagship project getting off the ground are rising.

UGL has been able to offload property services arm DTZ for a healthy price given the lack of final bids for the division a month ago. The announcement of a $1.215 billion deal with a consortium led by private equity giant TPG will come this morning, according to The Australian Financial Review, but it might not be the only significant action afoot for UGL.

The paper also reports the engineering contractor has been mulling the option of a fresh bid for Transfield Services or an offer for Leighton Holdings’ John Holland construction division with help from private equity players. Leighton last week said it would consider auctioning off John Holland in coming months and UGL appears keen to put its newfound cash pile to work quickly.

In retail, a key hurdle for the sale of David Jones appears set to be jumped tomorrow, with confidence shareholders of its South African suitor will lend their support. Should that occur, the last major stumbling block to Woolworths’ $2.15bn play would be stockholders in DJs through a June 30 vote. Provided the cagey Solomon Lew fails to find a way to block the deal, it appears a near certainty.

Elsewhere, Capital Investment Partners has likely offloaded the overwhelming majority of its stock in Coca-Cola Amatil for about $270m. The move comes as CCA trades near a five-year low, making it ripe for a fresh takeover offer. Lion Nathan could very well come knocking again soon after failing with its bid in 2008, but regulators and major CCA shareholder The Coca-Cola Company may be obstacles too large to overcome.

In the IPO market, lead managers of the float of Regis Aged Care will promote the company to fund managers this week, according to the AFR, ahead of a possible $700-$800 million listing. If interest is strong, a prospectus will be released in September for the second largest aged-care operator in the country.

Finally, administrators for Nexus Energy have confirmed plans to assess divestment opportunities, with a meeting of creditors slated for June 24. Failed bidder Seven Group is eagerly hoping it can claim the firm’s most desirable assets without too much competition, but that may be overly optimistic.

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