DataRoom AM: Floating free

Freelancer.com, somewhat appropriately, has decided to go it alone. Founder Matt Barrie has set the company on course for an IPO before the end of the year, which just might put the jitters about Australia’s resurgence back to an environment of sharemarket floats to bed once and for all. Meanwhile, it’s ACCC Day for Perpetual and it’s bid for The Trust Company, Warrnambool Cheese & Butter has urged moderation with the Bega bid and consortiums are mumbling in the background of BG’s Queensland gas infrastructure plans.

Freelancer.com, Matt Barrie, Recruit Co

Freelancer.com founder Matt Barrie has sparked great celebrations in the Australian tech sector by resisting the urge to sell out to Japan’s Recruit Co for $US400 million ($428.6 million).

But there will be a few people in the investment banking industry that will be partying just as hard. Here’s why.

Barrie has turned down a big payday from Recruit that would put his company under Japanese control — a country’s that isn’t exactly short a tech player — to list on the ASX instead. It should be emphasised that Freelancer.com is still entertaining other possibilities (which means there are other bidders sniffing around), but KTM Capital has been hired to manage a float by the end of the year.

The founder has made it clear he doesn’t want to tap out now and it appears that an IPO would be preferable because Barrie can maintain an influence of his tailoring. Buyouts are less flexible.

There have been concerns raised lately by some that the disastrous float of iSelect, another online player, would dent the sentiment of investors for IPOs.

Not only is the list of float candidates growing by the day, but we’ve now got a company that had a big fat cheque on the table and decided the ASX was a much better place to be.

While it’s not a done deal, it’s an enormous boost for the confidence for the industry to see a company take on risk for the sake of listing.

Doubters should take great notice of this news. The Australian IPO charge will be hard to stop now, particularly with the Federal Reserve declining to curtail its stimulus program overnight.

And while we’re talking floats, The Australian Financial Review reports that the $1 billion Redcape Hotel Group is preparing to make up to five acquisitions in suburban Sydney as it also looks at a potential IPO.

The Trust Company, Perpetual, Equity Trustees, IOOF

Today’s the day where the competition regulator could effectively decide who takes out The Trust Company.

It’s a three horse race between Perpetual, Equity Trustees and IOOF. The Australian Competition and Consumer Commission (ACCC) is due to hand down its decision on Perpetual’s sweetened $247 million offer for Trust Co.

There are no guarantees of course, but it’s broadly expected that ACCC chairman Rod Sims will give the green light to Perpetual, perhaps with a condition or two — we’ll get to that in a second.

Winning ACCC approval would hardly exclude Equity Trustees and IOOF from the race. Indeed, in a three-way race it’s very possible that there’s some more bidding to come.

The defining factor for many onlookers however is the prevalence of scrip in this exchange.

All three are offering varying amounts of scrip. The simple fact of the matter is that Perpetual has won the backing of the Trust Co board and it has more scrip in its pockets if it is forced to dig deeper. Target shareholders could cash out more easily from a big register with high turnover.

So what conditions could the ACCC impose? One logical theory doing the rounds is that it would force the divestment of Trust Co’s 13.4 per cent stake in rival bidder Equity Trustees.

Needless to say, it’s likely Equity Trustees will vote against the Perpetual offer. But the divestment of such a stake is unlikely to deter Perpetual from taking Trust Co out.

Over to you Mr Sims.

Warrnambool Cheese & Butter, Bega Cheese

As expected, Warrnambool Cheese & Butter has advised shareholders to take no action in relation to the $319 million offer from Bega Cheese.

Chairman Terry Richardson said the timing of the unsolicited bid, which would create one of the country’s largest publicly listed food companies, was opportunistic. The Australian dollar and an anticipated uptick in the global dairy industry haven’t kicked in yet.

"Directors will assess these factors as we consider whether Bega's offer adequately reflects the value of the WCB business today, the expected future earnings uplift from the initiatives currently underway and the improving market conditions," chairman Terry Richardson said.

Queensland Investment Corporation, Industry Funds Management

Queensland Investment Corporation has reportedly linked up with Industry Funds Management to make a run at BG Group’s pipelines that are attached to the Queensland Curtis LNG project.

The Australian Financial Review reports that any deal, which is being investigated for BG by Goldman Sachs, is tipped to be worth a casual $4 billion.

Expect APA Group, currently pursuing fellow pipeline company Envestra, to also be in the mix along with a venerable posse of local and international institutionals.

Wrapping up

Nexus Energy has reportedly eased up significantly on talk of a sale in the near-term of its interest in the Shell Crux liquids and gasfield off Western Australia’s Browse Basin.

The Australian reports that the company only mentioned the possible sale of “an interest in one or more of our assets”. This contrasts big time with the fanfare late last year.

In mining services, WorleyParsons has secured a contract to construction an oil sands project in Canada for $C387 million ($A402 million).

The deal covers engineering, procurement, fabrication and construction of field facilities for the MacKay River commercial oil sands in the hotbed of Alberta.

And finally, MMG chief executive Andrew Michelmore has used a speech to the Lowy Institute to encourage the new government to remain open to foreign investment, particularly from China. He also gave the now departed Labor government a kick on the way out.