DataRoom AM: BG's pipeline pricetag

As the pricetag for BG Group’s Queensland pipeline assets becomes clear, the field of suitors is also beginning to settle. And while at least five bids are believed to be forthcoming today, it may already be a race in three.

Elsewhere, Kerry Stokes’ Seven West and Seven Group are getting their toes wet offshore, speculation emerges that REA Group recently considered a major expansion play in the US and a big block trade in Veda Group stock is being prepped.

BG Group is chasing bids of $4 billion-plus for its Queensland gas pipeline assets as prospective buyers ready their first-round bids ahead of today’s deadline for submissions. Cheung Kong Infrastructure, which is bidding alone, and consortia headed by APA Group, AMP Capital, Hastings Funds Management and Industry Funds Management (IFM) are believed to be among the likely bidders.

However, the nature of the sale is tipped by The Australian Financial Review to favour operators, leaving Cheung Kong, APA’s consortium and the IFM-led joint venture (which includes Canadian pipeline operator Enbridge) as the three frontrunners. A shortlist is likely to be drawn up in the next fortnight, with a sale to be wrapped up before Christmas.

Meanwhile, with little happening in the way of media consolidation locally, Seven West Media has turned its eyes offshore for expansion opportunities. The head of the Kerry Stokes-backed firm, Tim Worner, said Seven West was “actively” assessing international deals, though cautioned an imminent deal was unlikely. The acknowledgment follows rumours earlier this year of Seven West’s interest in Britain’s Channel 5.

Seven West is not the only Kerry Stokes-chaired group grabbing the headlines, with Seven Group facing a lawsuit over its aggressive oil and gas expansion. The firm, which recently acquired embattled local firm Nexus Energy, is being sued by Apache Energy over a $68m purchase of some of Apache’s Texas ground. The June agreement saw Seven claim 11 per cent of Apache’s Bivins Ranch project from minority shareholder NextEra Energy, with Apache arguing Seven interfered with its rights to pre-emptively acquire the stake. Seven denies the claims.

Also looking offshore has been Raphael Geminder’s Pact Group, though it appears to have now opted against buying out Indonesian rigid plastic packaging group Dynapack. The deal, which has been in the works since last year, has been all but abandoned after the group labelled it “too expensive”. Other acquisitions are in the works, however, with takeovers in Europe and the US “on the horizon”.

Another firm reportedly looking at the US is local online real estate heavyweight REA Group*, which the AFR contends recently mulled a multi-billion dollar bid for US-based Trulia. According to the report, REA had secured a stake in Trulia prior to a successful bid coming forward from US giant Zillow. Still, it’s not all bad news for REA, with its decision to forfeit its stake likely realising a profit of over $20m.

In the IPO market, Regis Aged Care is expected to be the first big name to hit ASX boards at the conclusion of earnings season. The aged care operator begins an analyst roadshow next week, according to the AFR, ahead of a possible $500m listing that could value the group above $800m.

The news comes as recent ASX addition Veda Group prepares for a shakeup of its register as former owner Pacific Equity Partners mulls an exit strategy for half of its $1.2bn stake in the credit bureaux. The potential $600m deal represents over 30 per cent of the company, with Goldman Sachs, Citi, UBS and Macquarie Capital believed to have been tapped for one of the biggest block trades of the year.

Elsewhere, Genting Hong Kong is thought close to receiving clearance to raise its stake in Echo Entertainment. The AFR reports the Asian casino operator is working hard to obtain approval to lift its holdings above 10 per cent, but it is not yet clear how high it will lift its position, if at all.

Finally, Challenger has detailed plans for a $250m convertible notes issue, while NZ dairy giant Fonterra has secured a stake in Chinese infant formula group Beingmate as part of its strategy for Chinese expansion. The complex deal will involve an investment from Fonterra of more than $500m.

* REA Group is majority-owned by News Corp, the owner of this publication.