DataRoom AM: Leighton's China choice

Leighton Holdings picks a Chinese firm as the preferred buyer for John Holland, while Macquarie is tipped as the favourite for ING Direct's loan book.

Leighton Holdings may finally be set to rid itself of one of its unwanted assets as a Chinese firm slips into the front seat on the auction of John Holland.

Elsewhere, another name joins the race for BG Group’s Queensland pipeline assets, ING Direct continues to trim its local loan book, BHP Billiton decides against a Nickel West divestment and Telstra makes a bold e-healthcare play.

The $1 billion auction of Leighton Holdings’ John Holland business is rapidly nearing a conclusion amid reports China Communications Construction Company has been chosen as the preferred bidder. According to The Australian Financial Review, China Communications is the last firm standing after rival suitors Samsung and ATEC Rail exited stage left this week.

However, despite China Communications claiming the box seat on any deal, there is still the possibility of Leighton abandoning the sale should the final offer fall short of expectations.

John Holland is not the only high-profile auction drawing Chinese attention, with China Investment Corporation eyeing a seat at the table on a bid for BG Group’s $4bn pipeline assets in Queensland. The AFR reports that CIC may team with AMP on an offer ahead of the imminent bid deadline, pitting it against Cheung Kong, APA Group and IFM Investors.

In finance, ING Direct is pressing forward with plans to trim its local loan book, placing $1.5bn worth of mortgages on the market. The early favourite for the deal is Macquarie Group, which is expanding quickly in the home loan market and acquired a separate $1.5bn loan portfolio from ING in September.

In media, Nine Entertainment is believed to have officially dropped out of the running for Champ Private Equity’s outdoor ad business oOh!Media, with a December float now all but certain. According to the AFR, a bookbuild is planned before the end of November, with a listing to value the group between $400m and $450m.

One question being raised now is whether Nine may entertain a position as a cornerstone investor in oOh!Media, though this appears more favourable for Champ than Nine.

Also in the IPO market, the government has made plain its desire to draw strong offers through the Medibank Private bookbuild, informing institutional investors that preference will be given to those who make bids in the first 24 hours of the bookbuild above or equal to the final price, a rare move, according to the AFR.

Elsewhere, Telstra has claimed a strategic stake in healthcare software provider Orion Health ahead of the firm’s dual-listing on the ASX and NZX on November 26. The final stake of the $825m company is about 2 per cent, or just shy of $20m.

Finally, BHP Billiton has opted to retain its non-core Nickel West operation in WA after failing to secure an appropriate price from suitors Glencore and Jinchuan Group, while this week’s takeover talks at Ten Network are likely travelling at a slow pace amid reports serious discussions are still some time off.

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