DataRoom AM: Coles' prized vintage

Offers to buy the Coles-owned Vintage Cellars could fall at the first hurdle, while Lachlan Murdoch dismisses speculation that he wants out of the radio game.

The market was abuzz yesterday amid news private equity buyers were sniffing around a leading liquor chain owned by Coles. But while there may be truth to the speculation, the supermarket giant appears in no mood to sell.

Elsewhere, Lachlan Murdoch slams speculation of a sale of his radio assets, the IPO market continues to tick along nicely, Nexus Energy shareholders have further reason to feel aggrieved and BHP Billiton pledges more asset sales.

Private equity firms have reportedly been testing the waters on a possible $300 million deal to buy Vintage Cellars, one of the three liquor chains owned by Coles. The moves by at least two suitors would see Vintage Cellars split from the broader Coles group. While the identities of the suitors remain a mystery, Bain CapitalArcher Capital and Pacific Equity Partners have been singled out as likely candidates.

Still, it’s not much use lobbing an offer if the owner has no intention to sell and so it appears in this case as sources of The Australian dismiss the possible transaction as “rubbish”. Given Coles is just about to pursue a new turnaround strategy for its liquor operations, it is unlikely to be willing to offload the chain on the cheap.

Rumours of Lachlan Murdoch wanting out of the radio game appear to have been greatly exaggerated. On Wednesday, The Australian Financial Review reported that Murdoch was a seller of Nova Entertainment -- the owner of the Nova and Smooth FM stations -- at the right price amid claims of a testing of potential buyers’ appetites. But the News Corp chair quickly scotched the rumours, saying he had “no intention” to sell, with the reports dismissed as part of a “Fairfax agenda”.

Murdoch would be in line for a healthy profit if he had been planning to sell, with Nova reportedly worth more than double what his private investment firm paid for it a couple of years ago.

The IPO market received another boost yesterday as media monitoring group iSentia debuted to a warm reception. The company, which raised $283.5m through its float, lifted 19 per cent on the day. Nine of the 14 new listings this year are trading above their listing price, with all high profile floats of recent times being very well received by the market. It bodes well for several big name floats in the pipeline, including Healthscope and Medibank Private.

One company not hitting ASX boards anytime soon is EnergyAustralia, which had planned a listing a few years ago but kept delaying amid operational issues. According to Fairfax Media, the electricity retailer’s chief, Richard McIndoe, has said the opportunity to list “will come again”, but for now it seems the company is more focussed on opportunities to gain a foothold in the Queensland market.

The Newman government has outlined plans to open investment in its electricity sector, with EnergyAustralia keen to play a part.

The NSW government is similarly mulling a shake-up of its electricity sector, with a state Coalition party room meeting set to discuss plans to offload 49 per cent of the state’s $30 billion poles and wires on a 99-year lease.

Nexus Energy shareholders were already frustrated with the lowball 2c bid they received from Seven Group, but news that Seven lobbed a rejected, if tentative, bid of almost three times that will further enrage most investors. The shunned offer of 5.6c a share was reportedly put forward by Seven some time earlier this year.

Offshore, local hospital operator Ramsay Health Care is planning to extend due diligence on its proposed $1.45bn purchase of French giant Generale de Sante. The current deadline is tomorrow and Ramsay is reportedly still weighing whether it wants to proceed with the deal.

Finally, BHP Billiton boss Andrew Mackenzie has reaffirmed plans for the miner to sell more non-core assets, including Nickel West in WA, while China’s Baosteel and local firm Aurizon have officially delivered their bidder’s statement to Aquila Resources shareholders, presenting a 15-day deadline for the miner’s board to officially respond to the $1.4bn proposal.

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