DataRoom AM: DJs drama

Manoeuvrings around its share register suggest David Jones may have a mystery suitor on its hands, while a sweetened offer for Envestra from a rival bidder leaves APA Group with limited options.

Most David Jones shareholders would be more than happy to take the money offered from South African suitor Woolworths and run after a tumultuous period for the department store operator. But manoeuvrings around the register suggest it might not be that simple.

Elsewhere, Envestra’s board jumps into the camp of its Hong Kong suitor, Australand Property Group hints it may be interested in the latest takeover offer from Stockland, and National Australia Bank makes a move in the UK.

The Solomon Lew-backed S L Nominees has claimed a 0.65 per cent stake in David Jones as the retailer weighs whether there is a mystery suitor looking to halt its $2.15 billion takeover by South Africa’s Woolworths. About 10 per cent of the retailer has changed hands recently, with the takeover target looking to uncover the owners of a 6.9 per cent stake held by Deutsche Bank as well as the buyers of 15 million shares during Friday's trade, according to The Australian Financial Review.

It begs the questions, could Lew -- who has a fractured relationship with Woolworths and has former DJs boss Mark McInnes at the helm of his listed retail business -- be behind a play to keep DJs out of Woolworths’ hands? And if Lew has nothing to do with the 10 per cent, then who is looking for a seat at the table?

It is most likely that Lew is merely looking for a bargaining chip with Woolworths given he retains a 12 per cent in the Woolworths-controlled Country Road as well as several brands that could be impacted by the DJs takeover, but it’s an interesting subplot to what was looking like a simple takeover deal.

In other M&A activity, the board of gas group Envestra has thrown its weight behind a $2.37bn offer from Cheung Kong Infrastructure, leaving the Hong Kong firm in the front seat for a deal after outbidding rival APA Group. APA kickstarted the process with a $2.2bn offer in March that was largely supported by the target, although the two CKI representatives on the board (as a result of CKI’s 17.5 per cent stake in Envestra) were dissenters.

APA, which remains Envestra’s largest shareholder with a 33 per cent holding, was not consulted on the CKI approval and while it may look to vote down the deal, its shareholding will not be enough to stop CKI gaining a majority stake. It leaves APA with two options: yield or deliver an improved offer.

In property, Australand Property Group has agreed to open its books to suitor Stockland despite initially shunning its rival. Stockland recently upped its proposal to $2.5bn, with Australand’s board still weighing the merits of the ‘final’ bid as Stockland conducts its due diligence.

In the IPO market, several upcoming floats are being pushed to fund managers this week, led by the $650 million float of Asaleo Care (formerly known as SCA Hygiene). Around 67 per cent of the Sorbent maker will be up for grabs, with fund managers also weighing the merits in IPOs of Monash IVF, Hirepool, 3P Learning and Smartgroup this week, the AFR reports. Meanwhile, media monitoring group iSentia is due to list on Thursday.

Offshore, National Australia Bank is looking to offload a £700 million ($1.3bn) parcel of loans in the UK as rumours persist around plans for a divestment of its entire UK portfolio. According to Estates Gazette, Morgan Stanley has been tapped to test the market on the book of commercial property loans.

Finally, troubled rare earths miner Lynas has successfully raised $30m through a share purchase plan to add to the $12m it received from institutional investors. The company exited a trading halt on Friday and saw its shares slump 17.65 per cent, although they remain above the price at which new shares were offered.

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