DataRoom AM: Macquarie dropout

Macquarie bows out of the race for Shell’s Australian assets, while Rio Tinto appears to have halted its divestments.

Royal Dutch Shell has narrowed the list of suitable bidders for its Australian petrol retail and refining assets to one, leaving Macquarie Group as an under-bidder on a multi-billion dollar deal for the third time in a matter of months.

Elsewhere, Rio Tinto puts asset sales on the backburner, Saputo fails to claim full control of Warrnambool Cheese and Butter, Newcrest Mining rejects capital raising rumours and Westfield Group faces a delay on its demerger plans.

The auction of the downstream Australian assets of Royal Dutch Shell has taken a twist with Macquarie Group and joint venture partner Glencore Xstrata dropping out, according to Bloomberg. That likely leaves a consortium involving oil trader Vitol Group and the Abu Dhabi Investment Council in exclusive negotiations with the oil and gas giant.

A deal worth between $2.5 billion and $3 billion is seen as possible before the end of the month.

Rio Tinto appears to have called time on its divestment spree. Speaking after the release of profit numbers, Rio Tinto chief executive Sam Walsh said the group’s debt profile had improved enough that divestments will not be pursued unless offers are too good to ignore. This includes its 59 per cent stake in Iron Ore Co of Canada, which Rio had been shopping around with a price-tag of as much as $4 billion. Such has been the turnaround that the miner may soon pursue bolt-on acquisitions in copper and iron ore.

The most exciting recent takeover chase has come to a dull conclusion, with Saputo unable to reach 90 per cent acceptances before its Warrnambool Cheese and Butter offer closed yesterday. With Kirin Holdings clinging to 10 per cent, the Canadian firm couldn’t quite get to the compulsory acquisition stage in what was a fitting end to a complicated scrap.

A vote on the proposed merger and split of Westfield Group and Westfield Retail Trust may be pushed back. According to The Australian Financial Review, a vote on the complex deal isn’t likely until the end of May as financial regulator Australian Securities and Investments Commission takes longer than expected to assess the transaction.

Newcrest Mining yesterday dismissed speculation of another capital raising in a statement to the market. Some analysts were expecting the gold miner to announce fresh plans to raise equity upon the release of its latest earnings numbers today.

Divestments are on the cards at Treasury Wine Estates, if analysts get their way. Bank of America Merrill Lynch analyst David Errington is leading the charge, arguing the group would be worth $4.5 billion if it split its operations – nearly double its current value of $2.4 billion.

The $143 million property loan portfolio of collapsed lender Gippsland Secured Investments has drawn interest from Deutsche Bank and Nomura Holdings. Receiver Ernst & Young is leading the sales process, with law firm Ashurst also involved.

Nexus Energy has dismissed speculation it is close to a deal to sell its entire operations, though it remains in talks with third parties over the possibility of asset sales. Royal Dutch Shell and ConocoPhillips had been linked to the oil and gas group.

Ruralco Holdings has paid Anchorage Capital Partners $57.4 million to acquire water solutions group Total Eden Holdings. The agribusiness group has announced a capital raising worth $43.8 million to help fund the deal.

Seven West Media has secured a new credit facility worth $1.4 billion. The deal with seven banks will see the media group refinance its existing credit facilities.

Finally, we may have just seen the biggest M&A deal of 2014, with US cable company Comcast offering $US45 billion ($49.765 billion) for rival Time Warner Cable. However, regulators are likely to stand in the way.

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