DataRoom AM: Glencore eyes BHP assets

Glencore might make a play for some of BHP's non-core assets, while APA Group is the frontrunner in the race to purchase BG Group’s gas pipeline assets in Queensland.

At some time in the next 12 months Glencore is likely to make a significant purchase in Australia, and while all eyes are currently on Rio Tinto and Fortescue Metals Group, it could be BHP Billiton assets that end up falling into the hands of the Swiss-based giant.

Elsewhere, APA Group claims pole position in the race for BG Group’s gas pipeline assets, WiseTech Global narrows the field of potential advisors for its float and the NSW government receives mixed news for its privatisation plans.

BHP Billiton will kick-start the marketing of its $10-$15 billion non-core asset spin-off in February. The high-profile demerger is likely to include a bookbuild alongside an allocation to current shareholders in an attempt to allow fund managers to sort their weightings in both the core and non-core assets as they desire.

However, the extended weakness on commodity markets is beginning to pose a threat to the prospects of a successful demerger, with many investors expecting Glencore to make a takeover play for the planned spin-off if markets don’t recover shortly. Glencore is also still seen circling BHP’s Nickel West assets in WA.

Meanwhile, bids fall due today for BG Group’s $4 billion gas pipeline assets in Queensland. The valuable infrastructure is in the sights of APA Group as well as an AMP-China Investment Corporation consortium and an IFM-Queensland Investment Corporation joint venture.

APA is considered the frontrunner, particularly now that Hong Kong’s Cheung Kong Infrastructure has dropped out of the race. The preferred bidder will be chosen before Christmas.

Also in energy infrastructure, the planned sale of electricity poles and wires in NSW has been back in the spotlight over the past 24 hours after the Australian Energy Regulator published a report that appeared to back private ownership over public. However, pricing determinations have tempered expectations for valuations on AusgridEndeavour Energy and Essential Energy.

The lower-than-expected AER determinations for forward prices leaves pension and super funds at the head of the prospective suitor list due to their access to low rates and a long-term outlook. According to The Australian Financial Review, ASX-listed firms may now be on the sidelines, while an IPO is also more unlikely.

Offshore, Macquarie Group has wrapped up a $3.6bn purchase of E.ON’s Spanish power assets. The big-ticket deal will see Macquarie secure 60 per cent of the operations, while joint venture partner Kuwait’s Wren House will claim the other 40 per cent.

In the IPO market, WiseTech Global has reduced the field of candidates for advisory roles on its $1bn IPO next year, according to the AFRCredit SuisseMacquarie Capital and Morgan Stanley will vie for the two lucrative roles, with a decision imminent.

Elsewhere, waste handler Transpacific is on the lookout for acquisitions, with landfill owners in Sydney and Melbourne at the top of the shopping list, the AFR reports. BoralHanson and Dial-A-Dump all have assets of interest and a deal could be sealed before 2014 is over. It comes amid rumours of major M&A activity in the sector, with Chinese firms believed interested in SITACollex and Transpacific.

Finally, vocational education provider Australian Careers Network has revised the size of its planned listing from $100m to $54.4m as float fatigue sets in amid the IPO market’s silly season, while Surfstitch has secured $83m ahead of a December 16 listing.