GE Capital’s $1 billion sale of its local consumer lending business has drawn some big names as the auction moves closer to the pointy end. But will Wesfarmers be able to outplay financial service heavyweights?
Elsewhere, Orica weighs an offer for its non-mining chemicals operation from Blackstone, Fortescue Metals Group receives Chinese backing, Gina Rinehart makes a major dairy play and Pacific Equity Partners mulls a partial exit at Spotless.
A $7.5bn Australian and New Zealand loan book that incorporates store finance, credit cards and personal loans has no shortage of suitors as information memorandums are handed out to interested parties. The GE Capital-owned operation could reap as much as $1bn in the upcoming auction, with a Macquarie Group consortium that includes Pepper Australia and York Capital seen as a frontrunner alongside conglomerate Wesfarmers.
While the Macquarie versus Wesfarmers battle appears the likely storyline to watch, Blackstone, KKR, TPG Capital and ASX-listed FlexiGroup are also interested. Former favourite Westpac is now considered an unlikely starter, however, along with ANZ, Commonwealth Bank and NAB.
Meanwhile, Orica continues to assess the merits of a trade sale of its non-mining chemicals unit, despite offers coming in shorter than hoped. The Australian Financial Review reports that Blackstone is the frontrunner should a deal proceed, though a probable offer of sub-$800 million is still most likely to lead Orica to try its luck with a spinoff on the ASX.
In dairy, Gina Rinehart is the latest to see value in the local dairy industry given strong Chinese demand, joining forces with state-owned China National Machinery Industry Corporation on a $500m infant milk powder venture. Rinehart’s Hancock Prospecting will lead the partnership, which will include farmland and a processing facility in southeast Queensland.
In mining, Fortescue Metals Group has reportedly been given the heads-up from its key Chinese steel mill customers, that should money get short, they will be there to shore up the firm’s funding. According to the AFR, the implicit guarantee has been offered as the steel mills want strong competition to BHP Billiton and Rio Tinto.
Elsewhere, a strong run for Spotless on the ASX will allow Pacific Equity Partners to exit 25 per cent of its stake early. Investment banks are already circling over the potential $165m block trade, but PEP is believed keen to show a little patience amid heavy short positions on the stock.
In the IPO market, Healthe Care has tapped Barclays to run a $500m-plus IPO. The nation’s third largest private hospital operator, which was acquired by Archer Capital for $230m in 2011, will join bigger rivals Ramsay Healthcare and Healthscope on the ASX.
Ramsay, meanwhile, remains on the expansion trail, acquiring a share in five private hospitals in China and detailing plans to further expand in the region.
Finally, Casella Wines has secured control of Peter Lehmann Wines from The Hess Group for just over $50m, while ANZ has joined a growing list of Australian firms tapping European debt markets in raising €1bn in five-year covered bonds this week.