DataRoom AM: GE’s $2bn twist

The money giant may spin its consumer lending business into a $2bn IPO, while Macquarie joins the bidding queue at Royal North Shore Hospital.

A major twist is on the cards in the potential $1-2 billion sale of GE Capital’s local consumer lending business as advisers on the deal weigh the merits of an ASX listing.

Elsewhere, Macquarie Group makes a last-ditch push in the Royal North Shore Hospital auction, GWA Group offloads Brivis Heating & Cooling to Japanese interests and APA Group finalises the purchase of BG Group’s Queensland gas pipeline.

GE Capital’s Australian and New Zealand consumer lending business has drawn plenty of trade-sale interest as financial service players from across the country gather to make a play. But their hopes for an acquisition could be dashed as advisers on the sale consider backing a near $2bn IPO that would leave the likes of suitors Pepper Australia (in a JV with Macquarie Group), TPG Capital, The Carlyle Group and FlexiGroup empty-handed.

It comes as one prospective buyer, conglomerate Wesfarmers, loses interest in a bid due to fears it could put some GE Capital clients offside as they are competitors to its retail business. Tomorrow’s deadline for indicative proposals remains in place, however, and a healthy offer could take a float back off the table.

GE isn’t the only major auction on Macquarie’s agenda this week, with the firm also weighing a bid for control of Royal North Shore Hospital. It is believed the investment bank has made a last minute entry into the $1bn race as part of a consortium with InfraRed Capital Partners. RBS is tipped to announce a winning bid by Christmas with rivals to Macquarie including John Laing, AMP and Palisade Investment Partners.

In manufacturing, air conditioning and heating group Brivis Heating & Cooling could find its way into Japanese hands as its owner GWA Group weighs a bid from Rinnai. According to The Australian Financial Review, the potential $50 million deal will likely be announced in the next fortnight.

Meanwhile, advisers on the planned privatisation of Queensland power assets have visited Europe and the US to drum up interest in an auction many are now predicting will recoup over $30bn. Optimism isn’t quite as high in NSW as that state will likely only offer up 50 per cent stakes, though a price tag of $22bn is still expected.

Across the other side of the country, WA is believed to have settled on UBS and Azure Capital as advisers on its $1.5bn sale of the Kwinana Bulk Terminal and Port Hedland’s Utah Point port.

Also in infrastructure, strong speculation of a victory by APA Group in the BG pipeline auction proved on the money yesterday as it was revealed APA would pay $US5bn ($6bn) for the privilege. The deal will be accompanied with a $1.84bn capital raising.

Elsewhere, Crescent Capital Partners has received $1bn of demand for a $650m capital raising, according to the AFR. The private equity firm could put the funds to use almost immediately after reportedly being one of three to put forward final bids for Pentair Water Transport this week.

Finally, speculation of further M&A activity in the telco sector is swelling with iiNet at the centre of most rumours, while Godfreys has enjoyed a strong first day of trade, rising 10 per cent at the close on Wednesday and quelling some concerns about float fatigue.