DataRoom AM: Hit the road

Final bids for RiverCity Motorways are due today and the big banks are lining up for Lloyds' $9 billion sale.

The final offers for Clem Jones Tunnel owner, RiverCity Motorways, are due by the end of business today. Queensland Motorways is favourite to bag the fellow sunshine state road company, but there are some big rivals circling. Meanwhile, final offers for Lloyds are almost due, UGL is stressing that it ain’t dragging its feet on the demerger deal and Newcrest Mining has reportedly got some attention from a US investor…almost half a billion dollars’ worth of attention.

RiverCity Motorway Group, Queensland Motorways

Finals bids for RiverCity Motorways are due today and a decision on the winner of Brisbane’s Clem Jones Tunnel owner could even be made by the end of the month.

Queensland Motorways is slightly favoured to win-out in a field that includes infrastructure investors and retirement funds from home and abroad. The final price is expected to be as high as $750 million.

Kordamentha is acting as receiver for Queensland Motorways which collapsed under the weight of its debt in 2011. If you want a clue on precisely what happened, the equity holders that were wiped out are suing the traffic forecaster.

The Clem Jones Tunnel connects to roads owned by Brisconnections, which has a somewhat similar story for a fellow Sunshine state road player.

Lloyds Banking Group

Speaking of final offers, at least four bidders including big Australian lenders are preparing final bids for the Australian assets of Lloyds Banking Group.

According to Bloomberg, ANZ Banking Group, Westpac Banking Corporation, Macquarie Group and Pepper Australia are getting ready to lodge offers by the September 30 deadline.

The face value of the total assets is thought to be in the order of $9 billion.

Goldman Sachs and Credit Suisse are advising the British banking giant on the sale.

Speaking of Pepper, Business Spectator’s Data Room reports that the non-bank lender is chasing up to $18 billion in debt and financing businesses in Australia and Europe with its partners.

Having just challenged Resimac’s run at RHG, formerly known as RAMS Home Loans, it seems Pepper is packing quite a punch at the moment.


UGL chief executive Richard Leupen has reportedly dismissed suggestions that the company isn’t moving as quickly as it could be on the separation of its engineering and property businesses.

Speaking to the AFR Weekend, Leupin said the company could be ready for a demerger by June and that, if anything, he wants the process to be moving faster rather than slower.

“I think there’s been some implication that we’re trying to hang on, but the opposite is true...we’re putting people in to build out the companies, and the sooner we’re ready and able to get this done, the better,” he told the newspaper.

Previously, Leupen has said UGL would split sometime in fiscal 2015 and while the June timeline is at the early end of that guidance, it’s consistent.

If UGL is indeed ‘ready’ to split by June, no doubt you could add a month or two on for shareholder votes and subsequent court and regulatory approvals.

Leupen’s comments simply underline how much shareholders love demergers at the moment and how impatient they can be to get them.

Newcrest Mining

Newcrest Mining has benefitted with the rest of the gold miners from the Federal Reserve’s decision to delay it’s tapering exercise of QE3, but Australia’s largest gold miner has apparently got some more specific attention from the Americans.

The Australian Financial Review believes that it was New York’s exchange-traded fund Market Vectors Gold Miners ETF that picked up $445 million in Newcrest stock after the market on Friday.

Morgan Stanley reportedly handled the sale. Keep an eye on that one. That’s almost half a billion dollars someone’s thrown down.

Ruralco, Elders

Ruralco chief executive Richard England has raised the prospect of the company selling its 12 per cent stake in former merger target Elders.

When Elders begun its windup action Ruralco had already watched initial moves towards merger discussions go up in flames. This was followed by a rejection of a $250 million-odd run for Elders’ rural services division.

The strategic significance of the stake hasn’t paid off.

“The purpose of the stake has kind of lost its meaning,’’ England said, during the company’s latest results.

A decision on the stake won’t be taken until November.

Wrapping up

In competition regulation news (agreed, dullest sounding segue ever), The Australian Financial Review reports that Seven West Media has raised concerns to the Australian Competition and Consumer Commission (ACCC) about a possible joint ventur between Ten Network Holdings and Foxtel’s MCN.

The same newspaper also reports that the ACCC has raised anti-dumping actions that prevent cheap steel imports as “a possible obstacle” to its approval of BlueScope Steel’s $87.5 million takeover of two local steel firms from Hills Industries.

In New Zealand news (slightly more entertaining segue), Meridian Energy will flog as much as $NZ1.26 billion ($1.11 billion) worth of stock in its initial public offering.

The Kiwi government is moving to sell 49 per cent of Meridian, with individual investors allowed to pay for shares in instalments if they so choose.

Meanwhile, the NZ government has joined the Australian regulator and extended the trans-Tasman alliance between Virgin Australia and Air New Zealand.

And finally, trust us when we say we’re sick of talking about Billabong International in almost any capacity. Hence, this piece is right down the bottom.

The Australian reports that Billabong offloaded its interest in top accessories brand Nixon without telling investors for a month.

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