DataRoom AM: Beacon lights up

Beacon Lighting’s bright ASX debut bodes well for the IPO market, with further excitement around Japara Holdings' imminent float.

Australia’s flagging IPO market could be ready to stage a turnaround after the startling market debut of Beacon Lighting yesterday. The real tests are to come, but it’s a good sign as a bevy of big name companies prepare to hit ASX boards later in the year.

Elsewhere, a slump in the stock of Coca-Cola Amatil may bring predators back to the table, Padbury Mining’s bold Oakajee plans remain shrouded in mystery and Oz Minerals draws in plenty of interest in its massive Carrapateena project.

The IPO market has received a much-needed boost as newly listed Beacon Lighting enjoyed a remarkable first day on the ASX. The nation’s biggest lighting retailer saw its share price soar 60 per cent above its listing price in the first strong IPO reception since early December. The float raised $63.8 million through the sale of 45 per cent of the company.

It’s a rare glimmer of light for an IPO market that has seen several planned floats delayed or suspended this year. Further raising scepticism are reports that one of the largest planned IPOs of the year, the $2 billion float of catering services firm Spotless Group, has failed to ignite much interest among fund managers. According to reports, several local fund managers have questioned the pricing of the float, though there has been strong offshore interest.

Tomorrow, aged care provider Japara Holdings will offer a further insight into the strength of the market as it lists with a valuation of $525m.

Beverage bottler Coca-Cola Amatil has this week seen its shares plumb depths not seen since 2009 and that could tempt former suitor Lion Nathan to come back to the bargaining table, according to The Australian Financial Review. Any food and beverage business in Australia seems to be in play for offshore rivals and it would be a surprise if there weren’t at least a predator or three looking closely at a wounded CCA.

Lion made a bid in 2008 but dropped it after failing to find common ground with key shareholder The Coca-Cola Company.

Padbury Mining has delayed the eagerly awaited release of more details about the mystery backers of its $6.5bn Oakajee rail and port project. Friday’s shock announcement of funding from unknown sources drew raised eyebrows from both the ASX and ASIC, who requested more information. Yesterday, Western Australian Premier Colin Barnett joined the long line of doubters, suggesting the Padbury plan ‘lacked substance’.

Oz Minerals has received inquiries from a dozen companies regarding a stake in its Carrapateena project in South Australia. The company may recoup about $500m from a sale of half of Carrapateena, though chief executive Terry Burgess admitted the whole project was available should it receive a great offer. A deal is likely to be wrapped up by the end of the year.

Also in resources, QCG Resources will pay $40m for the rights to MMG’s mothballed Avebury nickel mine in Tasmania. Privately owned QCG is still in talks with lenders over financing.

Meanwhile, Seven Group has a contingency plan should disgruntled Nexus Energy shareholders reject its lowball takeover proposal, relying on its position as major senior debt holder to control the firm’s destiny.

Elsewhere, an independent review of Baytex Energy’s proposed acquisition of Aurora Oil and Gas by Grant Samuel has found it’s in the best interests of the target’s shareholders. The $1.84bn deal was announced in February.

It’s not the only takeover Grant Samuel has been asked to look into, with David Jones tapping the corporate advisory group to adjudicate on the worth of its $2.15bn takeover offer from South Africa’s Woolworths. Expect another answer in the affirmative.

Finally, five bids are tipped to be forthcoming for the Port of Newcastle ahead of the April 28 bid deadline, according to the AFR. It is expected the asset, previously valued at $700m, could fetch about $1bn.

Related Articles