DataRoom AM: DJs delight

A counter-offer to Woolworths' David Jones bid looks unlikely, while Woodside may sort out tax hurdles for its Leviathan project by next week.

David Jones has fallen into the hands of a retail giant, but not the one many expected. A bid from South Africa’s Woolworths has won over the department store operator’s board and investors are confident no counterbids are on the horizon.

Elsewhere, Woodside Petroleum makes progress in Israel, tech start-up Atlassian receives a mammoth valuation in its latest funding round, Wotif appears desperate to avoid an opportunistic takeover and Seven West Media decides against a British expansion.

David Jones has recommended a generous $2.15 billion offer from South Africa’s Woolworths, just months after shunning a nil-premium deal from rival Myer worth about $1.5bn. The news sent shares in David Jones to their highest level in three years, though given they remain 2 per cent below the $4-a-share offer, it seems investors are not banking on a rival bid emerging.

Myer, which bowed out of the race, also saw its shares jump -- in part because of overly optimistic hopes for more retail M&A activity. Perhaps the main reason for the upward move, however, was relief from investors worried Myer would raise its bid.

The takeover is expected to be finalised in July.

Woodside Petroleum appears to again be making progress on a deal to enter the Leviathan gas field in Israel. Several media reports from the Middle Eastern nation place Woodside execs in the country over the weekend, with discussions with the Tax Authority believed to be heading in the right direction.

According to Israeli business daily Globes, an agreement on the tax arrangements -- which delayed a final deal a fortnight ago -- could even be reached by the end of next week. But that may not be the end of it, as the owners of the project are apparently keen to amend the terms of the most recent memorandum of understanding. Further clouding the process are reports Leviathan’s size may have been overestimated by 5-10 per cent.

Fast-growing start-up Atlassian has secured venture capital funding that values the firm at $3.3bn. The staggering valuation places the Australian-founded software developer among the most prized venture-backed firms in the world. The latest funding round sees some Atlassian employees cash out through the $150m entry of T Row Price and Dragoneer Investment Capital. The previous funding round in 2010 valued the firm at $400m.

Meanwhile, online travel agent Wotif has chosen Goldman Sachs to serve as an advisor amid reports the firm is ripe for a takeover, according to The Australian Financial Review. The share price performance of the ASX-listed firm has been weak over the past 12 months, with Expedia and Priceline viewed as potential predators.

Elsewhere, a Canadian firm has joined the race for the Port of Newcastle, with Caledon Capital Management teaming with Deutsche Asset & Wealth Management and Global Infrastructure Partners on a bid for the $700m infrastructure asset, according to the AFR. The consortium will fight challenges from Hastings Fund Management and Hong Kong’s Cheung Kong Infrastructure for the prize.

It’s not the only Australian asset Cheung Kong is chasing, with the HK firm also hunting ANZ Terminals, the AFR reports. Second round bids for the $500m company are due before the end of May.

In media, Seven West Media has backed out of the race for Britain’s Channel 5. The broadcaster has been put on market at a valuation of $1.2bn and while Seven looked into a deal, it has opted not to lodge a bid, the AFR reports.

Finally, consumer goods giant P&G has offloaded three global pet food brands to Mars for $US2.9bn. The deal will see Mars, the owner of Pedigree and Whiskas, claim the rights to the Iams, Eukanuba and Natura brands.