DataRoom AM: Lew's next angle
Less than a week after David Jones was taken off the ASX, rumours are surfacing that Solomon Lew could make a play for its main rival, Myer. But is it too much of a stretch for the billionaire’s Premier Investments vehicle?
Elsewhere, BHP Billiton mulls a manganese exit strategy, Australian firms take note of possible asset sales by Talisman Energy and Netflix considers a strategic stake in Quickflix.
A number of analysts are taking a punt on Solomon Lew making quick use of the profits he will reap from the takeovers of Country Road and David Jones by putting forward a bid for Myer, according to The Australian Financial Review. The move, which would be carried out by the Lew-backed Premier Investments, has some logic given Lew unsuccessfully tried to team with Woolworths SA on its David Jones takeover, a sign he craves control of a local department store. He may also want to place Woolworths under pressure given their heated history. However, a successful bid will likely cost upwards of $1.7 billion and may be a stretch for the $1.45bn Premier Investments unless Lew can find a few willing investors to go along for the ride.
Meanwhile, BHP Billiton is believed to be in talks on a sale of its manganese assets, with the division valued around $1.5bn. The assets are part of a joint venture with Anglo-American, with both companies keen to exit their stakes. The field of buyers is not yet clear, but the new vehicle of former Xstrata boss Mick Davis -- X2 Resources -- would be a logical candidate. BHP owns 60 per cent of the JV, which includes two South African mines, one Australian mine and associated processing plants.
In energy, Talisman Energy has drawn Australian interest for a potential sell-off of $5bn worth of assets in the Asia-Pacific region, according to the AFR. Santos, Oil Search and Horizon Oil are all considered prospective buyers for Talisman’s $400 million PNG acreage, while its Malaysian interests may draw the attention of both Santos and AWE. The speculation is swirling just a month after Talisman put its stakes in two Australian oil fields up for grabs.
Further complicating the process was confirmation overnight from Talisman it had been approached by Spanish energy giant Repsol over “various transactions, amid talk a full takeover bid could soon be forthcoming”.
In media, local streaming business Quickflix is in the sights of US giant Netflix, with reports “serious” discussions are underway over a significant shareholding. The move is possibly an endeavour from the US firm to limit the prospect of a Quickflix takeover from the likes of potential rivals Nine Entertainment and Seven Group as it gears up for an Australian launch.
Elsewhere, Leighton Holdings’ $1bn-plus auction of construction subsidiary John Holland has drawn interest from Spain, France and China ahead of first round bids falling due today. Acciona is the latest to be linked to the contractor, although Spain’s Ferrovial and France’s Bouygues appear the frontrunners. Private equity and Chinese firms have also been mooted as possible suitors.
In resources, Linc Energy has collected 40 expressions of interest for its Australian coal assets ahead of a July 25 deadline for the receipt of indicative bids, the AFR reports. Linc, which last year shifted from the ASX to the Singapore Exchange, is hoping to recoup as much as $150m from the divestment.
Also in resources, Rio Tinto boss Sam Walsh has distanced his firm from the prospect of significant M&A, saying he ‘doubted’ Rio would pursue a major acquisition in the near-term.
Finally, software firm Aconex has been warmly received on an investor roadshow in Asia ahead of a possible float on the ASX, while Computershare has paid just shy of $90m for Homeloan Management Limited, a third party mortgage administration firm in the UK.