DataRoom AM: Hot property

Simon Property Group has its eyes on CFS Retail, while Primary Health Care could also be a takeover target.

Expectations for a major property takeover in Australia remain high, though reported Westfield suitor Simon Property Group is seen keener on the $6.4 billion CFS Retail than the Lowy-backed firm.

Elsewhere, Primary Health Care attracts the attention of at least one suitor, Seven Group faces a new roadblock in its Nexus deal, and an imminent block trade in Nine Entertainment appears less likely.

US behemoth Simon Property Group has reportedly overlooked potential takeover targets Westfield and its spin-off Scentre in favour of ASX-listed CFS Retail, which had a target placed on its back after Commonwealth Bank’s recent internalisation of management. It is believed that any offer for control may involve Simon selling CFS’s 50 per cent stake in Chadstone Shopping Centre to John Gandel in return for Gandel offloading his 26.74 per cent position in CFS.

Another local firm tipped to be in the sights of a suitor is Primary Health Care, as The Australian Financial Review reports that at least one prospective bidder, potentially a private equity firm, has been doing the sums in recent weeks. There is nothing in recent share price movements to suggest a deal is imminent, however, as Primary’s stock hovers just above its 52-week low.

Meanwhile, Seven Group’s controversial $190 million takeover of Nexus Energy is not yet a done deal, with angry Nexus shareholders calling for ASIC to intervene. The corporate regulator is listening to the concerns of the group -- labelled Nexus Battle -- but the development is most likely to slow the deal, rather than stop it outright.

In resources, the falling iron ore price could impact BC Iron’s $250m play for Iron Ore Holdings as BC is allowed to walk away if the price stays below $US90 a tonne for 20 consecutive days. The potential issue has raised its head as BC received approval from the Pilbara Ports Authority for a change of control, a key condition for the takeover’s progression.

Elsewhere, investment banks lining up for some action in a possible block trade in Nine Entertainment stock have received some bad news in an AFR report this morning, as it appears Apollo Global Management is keen to retain most of its holding for the medium term. It leaves just Oaktree Capital’s 14.3 per cent stake potentially on the chopping block in the next 12 months.

In infrastructure, the AFR reports that BrisConnections receiver PPB Advisory and adviser Fort Street have cancelled a lender meeting slated for Friday, delaying the possible sale of the troubled toll road group. A number of new players have claimed debt in the firm in the past month, placing a question mark on the timing of any auction.

In finance, NAB’s private wealth operation, MLC, has divested itself of a $750m portfolio of investments to Partners Group, according to the AFR. The deal was made to reduce the firm’s allocation to private equity.

In the IPO market, vacuum cleaner retailer Godfreys has tapped Credit Suisse and Commonwealth Bank to lead a $100m-plus IPO later this year, while the AFR reports Think Childcare and Education has stepped up its push to list next month. The childcare centre operator will hit boards on October 8 with a valuation of close to $40m.

Finally, the Woolworths-backed ALH Group has offloaded its liquor retail property business for $603m to HOSTPLUS and Charter Hall, while the long-running takeover of Goodman Fielder has hit another hurdle as China’s regulatory authorities slow progress on the $1.9bn deal.