DataRoom AM: Glencore’s Rio retreat

Rio Tinto shares look set to fall after Glencore hosed down rumours of an imminent merger with the mining giant, while NAB is acquiring assets in the UK.

Yesterday’s rumours of Glencore interest in Rio Tinto were confirmed by the target yesterday and then put to bed for at least six months by the suitor overnight. It all points to Rio shares taking a bath today.

Elsewhere, National Australia Bank makes another move in the UK, Coopers Brewery puts up more barriers for prospective buyers and Rip Curl continues to draw plenty of takeover interest.

Glencore has distanced itself from a market-shifting takeover of Rio Tintosaying it no longer harbours active plans for a $180 billion merger. The announcement from Glencore, made early this morning (Australian time), appears to be predicated on the inability for a friendly deal to be reached and follows reports Glencore boss Ivan Glasenberg spoke directly to Rio chairman Jan Du Plessis in July about the idea to create the world’s largest miner.

It’s not the end of the story, rather just the closing of a chapter, as Glencore has hinted it may be interested in another play for Rio in the future. However, the Swiss heavyweight is unable to make any moves for at least six months due to UK takeover laws. The news leaves Rio stock ripe to give up yesterday’s 4 per cent gains during local trade today.

Meanwhile, National Australia Bank has secured a majority stake -- believed to be just shy of 75 per cent -- in a British commercial property fund manager that has over $7bn in funds under management. The deal with Orchard Street Investment Management follows NAB’s recent sale of distressed loans in its UK portfolio and comes despite a push to refocus attention on local markets.

In the food and beverage sector, Coopers Brewery has built a bigger wall to any would-be suitors, quietly making alterations to its constitution to ward off the threat of a takeover. Lion Nathan made a $420 million move on Coopers in 2005 -- blocked in part due to the brewer’s constitution -- and the latest tweaks are almost certain to keep it independent in the long-term.

Another privately-owned takeover target, Rip Curl, has seen private equity interest pick up again recently, despite the firm declining a $400m takeover in 2012. No formal sales process is underway, however, and a clear offer has yet to be tabled amid persistent IPO speculation.

In the IPO market, Perpetual has divulged plans for a potential $600 million listed investment company. According to The Australian Financial Review, the fund manager lodged a prospectus with ASIC yesterday that details a possible listing on December 12, provided at least $150m is raised.

Elsewhere, Quadrant Private Equity and its co-investors in APN Outdoor will secure $217m through the float of the outdoor advertising business, with the deal valuing the firm at as much as $450m ahead of a November 14 listing.

The action comes amid doubts over the government’s $5bn float of Medibank Private, with some Medibank policyholders believed to be considering legal action amid claims they own part of the business. The government seems relaxed about the issue and it appears unlikely to cause delays to the eagerly-awaited float.

Boosting the potential listing of the state-owned private health insurance group was yesterday’s stunning debut from Regis Healthcare, which jumped 10 per cent. The lift also served as a positive sign for potential IPO candidates Estia and Allity, rivals of Regis in the aged care sector.

In the dairy sector, NAB Advisory has been tapped to sell dairy farmer Moxey Farms. The NSW-based group could expect to secure a price tag of about $100m, the AFR reported.

Finally, financial services behemoth TIAA CREF has joined with Federation Centres on the $416m acquisition of the Mount Ommaney shopping centre in Brisbane, while James Packer is set to finalise the multi-million dollar purchase of Peter Holmes a Court’s 37.5 per cent stake in NRL premiers South Sydney, according to Fairfax Media.

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