DataRoom AM: Centerbridge strikes again

Centerbridge Partners looks to have gained a majority stake in Boart Longyear, while The Carlyle Group reportedly drops out of the race for Orica's $1bn non-mining chemicals division.

Boart Longyear has endured a rough few years and it now appears set to fall into the control of distressed debt investors, but long-suffering investors won’t quite be left with nothing.

Elsewhere, the race for Orica’s non-mining chemicals division loses a big name, Transfield tries to avoid takeover distractions, Oroton is linked to M&A activity and local gold miners become the subject of Chinese attention.

Three months after claiming a 12.7 per cent stake in troubled drilling services provider Boart Longyear, distressed debt investor Centerbridge Partners appears to have made a successful bid for a majority stake in the business. According to The Australian Financial Review, a $300 million debt-and-equity deal has been arranged that will ensure existing stockholders retain their shares, albeit heavily diluted, in a deal reminiscent of Centerbridge’s Billabong swoop last year.

Meanwhile, the number of suitors for Orica’s $1 billion non-mining chemicals division is on the wane, with The Carlyle Group exiting stage left, the AFR reports. It leaves BlackstoneBain Capital and Pacific Equity Partners as frontrunners ahead of the November 7 bid deadline, but a spinoff on the ASX remains the best bet.

In infrastructure, Transfield remains resolute on its decision to not provide suitor Ferrovial full access to its books amid concerns it will be a distraction. The ASX-listed firm will give the Spanish-based Ferrovial access to some confidential information, but customer contract details will not be forthcoming. The news dampens the prospect of a higher bid than the shunned $1bn offer, though other prospective buyers could yet show their hands.

In mining, Shandong Zhaojin, one of China’s largest gold miners, has said it is in discussions over Australian acquisitions. While no names have been thrown up, the firm has narrowed its potential targets with minimum grade and deposit size requirements. Among the companies it could potentially be circling is current takeover target Orbis Gold, as well as long-rumoured targets such as Medusa MiningSilver Lake and, at a higher price point, Northern Star.

In retail, Oroton has been linked to both Rodd & Gunn and Oxford as it continues to recover after losing a key contract with Polo Ralph Lauren. It is believed talks were held with Rodd & Gunn earlier this year and while the trail has gone cold since, there are hopes a $10m deal could eventuate. It is also speculated that Oroton itself could become the subject of private equity interest, with a $200m-plus takeover a possibility given weakness in its share price.

In property, the $50bn QSuper is continuing to chase offshore purchases after spending big on recent high-profile deals in London and New York. The second largest industry super fund in the country says it has “outgrown Australia”, with overseas property a key focus.

Closer to home, real estate franchise LJ Hooker is seen making progress on a sale of its business with advisor Lazard. It is believed Century 21Ray White and McGrath Real Estate all came knocking prior to the launch of the sales process, while Mortgage Choice, Pacific Equity Partners and US-based Realogy are seen as likely suitors now the auction has begun.

Elsewhere, investors are waiting patiently for an update from Asciano on talks to sell part of its Patrick ports business to China Merchants Group. A non-controlling stake of about $1bn has previously been speculated, with the firm’s quarterly report today likely to shed further light.

Finally, Woolworths has refuted rumours it could put Big W on the auction block, while agribusiness Elders has secured a new working capital facility with ANZNAB and Rabobank.

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