DataRoom AM: Leighton's tight race

The race for Leighton Holdings’ John Holland business takes an unexpected turn, while merger speculation surrounding Ten Network refuses to die down.

The auction of Leighton Holdings’ John Holland division may be wrapped up by Christmas, with some last minute wrangling from Korea’s Samsung potentially placing it in the driver’s seat on the deal.

Elsewhere, clarity on merger speculation surrounding Ten Network is hard to find, Macquarie and Westpac settle ahead of the pack in the chase for GE Capital’s consumer lending business and APA Group opts to make a play for BG Group’s pipeline assets on its own.

The race for Leighton Holdings’ John Holland business has taken a twist with this week’s rumoured entry of ATEC Rail now linked to the bid by Korea’s Samsung. The latest speculation suggests that Samsung -- perhaps with assistance from Leighton -- has sought ATEC to take the rail operations of John Holland, which the Korean firm has little interest in acquiring. Such a move will allow Samsung a better chance to beat out rival bidder China Communications Construction Co, which is likely to make a play for the entire John Holland business.

Meanwhile, reports continue to emerge of a buyout of Ten Network, with the latest an Australian Financial Review assertion that US cable group Discovery Communications could team with Foxtel on a deal. As Business Spectator’s Stephen Bartholomeusz pointed out yesterday, such a deal will likely meet significant regulatory resistance.

Fairfax and Providence have also recently been tied to a play for Ten, yet the firm’s stock price is down 25 per cent this year. Perhaps that suggests that where there’s smoke, there’s a lot of hot air. The key piece of new information is a claim Ten adviser Citi has requested preliminary bids from suitors by the end of the month, so we wait with bated breath for a few more weeks.

In finance, the auction of GE Capital’s $1 billion consumer lending business in Australia is gathering momentum as Westpac and Macquarie separate themselves from the rest of the pack. The two heavyweights are seen to have too much firepower for potential suitors Pepper Australia and Blackstone, while NABANZ and CBA are tipped to harbour less interest.

In infrastructure, APA Group has decided to go it alone on a bid for BG Group’s $4bn pipeline assets in Queensland, potentially leading to a $1bn capital raising, according to the AFR. APA will be fighting Cheung Kong Infrastructure and consortiums led by AMP Capital and IFM Investors on the deal.

Elsewhere, Transfield Services has raised the stakes on a potential takeover, putting the pressure firmly on suitor Ferrovial after raising earnings guidance by 8 per cent. The two firms remain at odds over access to confidential information for due diligence to be carried out, with the odds of a successful bid lengthening by the day.

In energy, new details have emerged on the lead-up to Seven Group’s 2c a share bid for Nexus Energy, with confirmation Nexus ignored a Seven offer worth 5.3c a share just weeks prior. Nexus’ future remains uncertain as Seven’s planned takeover goes through the courts.

Finally, NZ-based aged-care operator Arvida is set to seek support from Australian investors next week ahead of its $250m-plus IPO, while Bailador Technology Investments has raised $25m ahead of its listing on the ASX on November 19, the AFR reports.