DataRoom AM: Eyes on Ten

Ten Network’s latest profit downgrade has private equity firms sniffing around for a cheap bid, while Mantra’s weak IPO has fears of float fatigue seeping in.

The struggles at Ten Network have ensured plenty of speculation over its future and if the latest is to be believed, we might not have to endure much more of it.

Elsewhere, Frank Lowy gets his restructure wish, M2 Group mulls a play for Lumo Energy, David Jones cautions of a further takeover vote delay and fears of float fatigue come under the microscope.

Private equity firms are believed to be circling Ten Network after its latest profit downgrade sent its share price to near-record lows. US media investor Providence Equity Partners may be the closest to putting forward bid for the group, with The Australian Financial Review reporting it has been crunching the numbers ever since a visit to meet media firms in Australia earlier this month.

Talks are rumoured to be at their early stages and it’s not known if Ten’s major shareholders -- Lachlan MurdochJames PackerGina Rinehart and Bruce Gordon -- would assist what would be a rather opportunistic bid.

Meanwhile, the IPO market is threatening to go the same way it did at the end of last year after a middling debut by Mantra Group. The hotels group closed about 1 per cent lower on Friday, following retailer PAS Group as the second consecutive closely watched listing to fall on the first day of trade.

All eyes will turn to Monash IVF and Asaleo Care later this week as they hit ASX boards and should they both disappoint, minor concern about float fatigue will grow to full-blown fear.

The small IPO speed bump comes as Healthscope’s owners continue to press forward with plans for a $5 billion float, testing investor interest on the deal during an Asian roadshow last week.

In property, Frank Lowy’s restructure dreams for his Westfield empire have been realised as Westfield Retail Trust shareholders backed the $70bn proposal at the second attempt on Friday. It was a tight vote, as expected, with the 75 per cent threshold cleared by a little over 1 per cent.

In energy, LNG Ltd has held talks with PetroChina over a possible joint venture deal on its Fisherman’s Landing project in Gladstone, according to the AFR. The news comes as the Arrow JV between Shell and PetroChina continues to hunt for appropriate partners to unlock its reserves, with Santos recently rumoured to be a frontrunner.

Also in energy, telecommunications firm M2 Group may branch out with a $300 million play for electricity and gas retailer Lumo Energy, the AFR reports. An indicative bid is reportedly being put together, but the group may have to stave off competition from ERM PowerAlinta EnergyOrigin Energy and EnergyAustralia.

In retail, the David Jones saga could roll on for a while yet, with the department store operator’s chairman Gordon Cairns warning the date of the shareholder vote could be further extended as confusion reigns over Solomon Lew’s plans for his 10 per cent-plus stake. The date was last week put back by a fortnight to July 14.

Finally, Insurance Australia Group’s planned purchase of Wesfarmers insurance underwriting operations has cleared the final regulatory hurdle, while Leighton has made quick progress on the possible divestment of its John Holland and Services operations by forwarding sales documents to potential suitors.

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