DataRoom AM: Leighton lightens the load

Leighton reportedly puts another subsidiary on the auction block, while the sale of GE Capital’s local consumer lending business nears completion.

Leighton Holdings has been in the midst of a major asset sell-off for the better part of six months but it appears far from done as a major subsidiary gets added to the auction list.

Elsewhere, the scrap for GE Capital’s local consumer lending business moves toward the pointy end, the Future Fund is rumoured to be interested in the east coast power sell-off and a property deal dampens talk BHP Billiton could put its planned demerger on ice.

Leighton Holdings appears intent on further rationalising its streamlined business, reportedly adding engineering service provider Thiess to its auction list. The operation is valued at about $2 billion and would represent the largest sale within the ongoing restructure under the now Spanish-controlled group.

Leighton offloaded John Holland and 50 per cent of its services operations (which included a division of the Thiess business) for $1.85bn in December, but a sale of Leighton Properties to Stockland fell through just before Christmas leaving a hole in plans to reap $3bn in asset sales. Alongside the possible sale of Thiess, Leighton is also looking to rid itself of a controlling stake in listed property developer Devine, with AVJennings a frontrunner in the ongoing auction.

In finance, the auction of GE Capital’s local consumer lending business is heating up as it nears a March conclusion. According to The Australian Financial Review, GE Capital has opened its data room to four suitors, with a joint venture between Macquarie GroupPepper Australia and The Carlyle Group remaining the frontrunner for the $2bn business. WesfarmersFlexiGroup and TPG Capital are believed to front the three other consortia involved in the auction.

Meanwhile, weakness on global commodity markets has ignited speculation BHP Billiton may reassess its plan to spin-off non-core assets in 2015 under the moniker of South32, but a 10-year lease agreement with Brookfield’s listed office property trust suggests otherwise. The Perth property deal will see South32 operate in a separate office to BHP and is a signal of intent that the demerger will not be delayed.

In infrastructure, Queensland Investment Corporation is tipped to be teaming with IFM to put forward bids for power assets in NSW and Queensland when they go on sale later in 2015. However, there is a school of thought that QIC is merely acting on behalf of the Future Fund, which can only invest with the aid of a party acting on its behalf.

It brings another dimension to the privatisation of $30bn in energy assets, with the likes of Hastings Funds ManagementAustralianSuperCheung Kong Infrastructure and China’s State Grid all in the mix.

Offshore, Macquarie continues to maintain an active approach to the management of its global portfolio, this time operating on the sell-side in seeking an exit from its stake in a Korean cable TV operator. Macquarie and JV partner MBK Partners have tapped Goldman Sachs to sell C&M Co, with bids upwards of $3bn expected.

Finally, Fairfax Media has paid $72m to secure the 50 per cent stake it did not already own of Metro Media Publishing Holdings, while fund manager Wilson Asset Management is hoping to raise up to $100m through a share purchase plan at listed investment company WAM Capital.