Hopes for a 2014 sale of local active wear retailer Lorna Jane have been dashed, with an auction canned after the firm’s suitors delivered subdued offers.
Elsewhere, rumours of a Glencore-Rio Tinto tie-up persist, investors see merit in speculation of a Recall takeover and a partial sale of SAI Global is on thin ice.
The auction of retailer Lorna Jane has been called off after the firm’s owners, led by founder Lorna Jane Clarkson and Champ Ventures, decided the offers put forward undervalued the company, Fairfax Media reports. The $500 million women’s activewear group was put on the chopping block in May after opting against a float earlier in the year. The sale reportedly drew interest from Foot Locker, Under Armour, Bain Capital, Permira and Advent International.
Meanwhile, analysts see great potential for a tie-up of Glencore and Rio Tinto’s NSW coal assets after a site tour from Glencore hinted at annual synergies worth about $500m. Still, Credit Suisse believes there is “limited progress” on a deal.
The chatter comes amid continued talk of Glencore weighing a takeover of larger rival Rio, with the latest speculation from the AFR signaling the Swiss-based firm may have called on Standard Chartered to assess the far-fetched idea.
Recall Holdings has insisted it is not in takeover discussions with potential suitor Iron Mountain despite rumours of interest from the US data storage firm. Despite the denial, a Bloomberg report suggests Iron Mountain is still preparing a $2.3 billion-plus bid, only it hasn’t informed Recall just yet. It appears that investors are on board as well, with Recall stock ending 12 per cent higher despite the firm’s statement coming out in morning trade.
Elsewhere, patience is running in short supply at SAI Global as the firm presses its advisers to seal the sale of one of its three divisions by the end of the week. Reports suggest that a lack of progress this week will see the auction abandoned, just a fortnight after a full sale was called off.
In online classifieds, News Corp is looking to the US to see if its success with REA Group can be enjoyed elsewhere. The media giant, owner of 61.6 per cent of ASX-listed REA, said it would pay about $1.1bn for real estate listings business Move, with REA claiming 20 per cent and News the rest.*
In property, the battle for control of the $1bn Royal North Shore Hospital in Sydney is heating up as Capella Capital joins the list of prospective buyers, which also tallies AMP, Palisade Investment Partners and John Laing. Royal Bank of Scotland has tapped Goldman Sachs to sell the asset, with first round bids due next month.
In the IPO market, Huon Aquaculture is meeting resistance to a push to be priced at a similar multiple to listed rival Tassal. The salmon producer may have to accept a valuation of 10 times earnings (or about $400m), short of the 13 times that Tassal trades at currently.
Finally, BC Iron has lifted its shareholding in target Iron Ore Holdings above 85 per cent and within sight of the 90 per cent threshold for a compulsory acquisition, while Snowy Hydro mulls a bid for the NSW government’s Delta Coastal power plants.
* News Corp is the owner and publisher of Business Spectator.