DataRoom AM: BHP cast-off

BHP Billiton looks to be pressing ahead with divesting non-core assets, while the IPO market steps into the spotlight.

BHP Billiton is pressing on with the divestment of non-core assets, reportedly edging close to a $500 million sale in Guinea. The deal just needs to be signed on the dotted line but given the recent history of the project, that might not be the formality it seems.

Elsewhere, there’s plenty of action in the IPO market as some planned listings collapse and others emerge, the number of possible suitors circling Goodman Fielder rises and Dart Energy falls into the hands of a British firm.

BHP Billiton is in “deep, deep discussions” with giant steelmaker ArcelorMittal over a $500m offload of its stake in the Mount Nimba iron ore deposit in Guinea. It would wrap up an auction that has run for about 18 months, with BHP initially selecting Brazil’s B&A Mineração as its preferred bidder from a small group of suitors, which included ArcelorMittal.

The world’s biggest miner holds 41.3 per cent in Mount Nimba -- with the rest owned by Newmont Mining and Areva -- and BHP was originally tipped to reap $500-$600m from a sale. However, iron ore price weakness and political issues in Guinea (Simandou, anyone?) saw B&A drop out of the race this year after over 12 months of negotiations. It was thought that BHP would be unlikely to find another buyer so should it secure a $500m price, it would be a very strong result in light of the recent iron ore price volatility.

In the IPO market, Australian Gaming & Entertainment is the latest potential new listing to fall by the wayside. While the market has been bursting to life over the past month, there still appears to be certain sectors more heavily in demand than others. AG&E, a new vehicle, was set to use the $80m from an IPO to go towards its purchase of five gaming-focussed Sydney pubs.

Another failed listing this year, online shopping retailer Ozsale, hasn’t given up hopes for a $500m listing, with the firm’s owners now shifting their focus to the London Stock Exchange. The plans have received a leg-up with the sale of 25 per cent of the company to the billionaire boss of rising British retailer Topshop.

Meanwhile, QCG Resources is hoping for better luck as it launches plans for a float on the ASX today. QCG is hoping to raise $60m through an IPO, with the proceeds to largely be directed towards its $40m purchase of the Avebury nickel mine in Tasmania from MMG. The company will change its name to Avebury Nickel Mines upon listing.

Also tapping the IPO market is media monitoring business iSentia, which has wrapped up a book build for its listing by successfully raising $287.4m, while planning for the massive $5bn float of Medibank Private continues apace. According to the AFR, joint lead managers Deutsche BankGoldman Sachs and Macquarie Capital are pressing for the listing to be moved up to November, from current expectations of March-April next year.

Elsewhere, Goodman Fielder could have another bidder circling, with Parmalat declaring it is closely keeping an eye on proceedings, according to The Australian Financial Review. However, the Italian-based dairy giant is likely more interested in just the NZ dairy assets, which were put up for auction last week. The news follows rumours former suitor Pacific Equity Partners is mulling a rival bid to the $1.27bn one put forward by Wilmar International and First Pacific.

In energy, ASX-listed Dart Energy will be bought out by UK-based IGas Energy in a deal worth close to $210m. The deal represents a 40.6 per cent premium to the last traded price of Dart stock.

Finally, Apple is believed to harbour interest in Beats Electronics and should a takeover eventuate, it would provide a multi-million dollar payday for Beats investor James Packer.

Related Articles