DataRoom AM: Oakajee query

ASIC looks for clarity on funding Padbury Mining has secured for Oakajee, while marketing for the Spotless Group IPO is set to begin.

The long stalled Oakajee port and rail project in Western Australia is back on the agenda after Padbury Mining secured billions of dollars in funding for its development. But many questions remain unanswered by the mining minnow.

Elsewhere, Bank of Queensland confirms a capital raising to fund buying the bulk of Investec Australia’s assets, the Spotless Group IPO promises to be a healthy earner for Pacific Equity Partners and it seems there are few roadblocks to the takeover of David Jones.

Mining junior Padbury Mining is pressing ahead with the ambitious Oakajee rail and port project in WA after securing funding at the end of last week. The funds will come in three tranches: a first tranche of $US470 million, a second of $US3.45 billion and a third of $US2.55bn. On the surface it’s an impressive deal for a $100m company to make, but mystery surrounds the identity of the “private Australian equity investors” backing the deal -- such that the corporate regulator has ordered the firm to reveal more details.

The news of funding for the long promised infrastructure follows a year after Japan’s Mitsubishi abandoned its Oakajee plans, and many are sceptical this may be another false dawn given the empty infrastructure promises over recent years. Still, shares in Padbury jumped 65 per cent ahead of a fresh trading halt, as investors made a punt on the deal’s worth.

Bank of Queensland has confirmed a $440m purchase of the majority of Investec Australia’s operations, announcing a $400m share placement to fund the deal. The raising will come at a 12.6 per cent discount to its last traded share price ahead of the deal, with around half set aside for institutional investors and the rest for retail shareholders.

Also in finance, IOOF has opted not to buy into Equity Trustees’ $160m equity raising just months after purchasing 13 per cent of the firm, according to The Australian Financial Review. The move sees IOOF’s interest halved and suggests the firm has no near-term plan to launch a takeover offer.

In the IPO market, marketing of the eagerly awaited relisting of catering firm Spotless Group will begin today. According to the AFR, owner Pacific Equity Partners is hoping to raise $1bn in the May float through a back-end bookbuild. PEP is believed likely to offload 50 per cent of the business through the IPO, recouping all of the $720m it paid in 2012 and still retaining half of the business.

Meanwhile, South Africa’s Woolworths is preparing to present the case for its $2.15bn takeover of David Jones to its shareholders this week. The deal needs the backing of both Woolworths’ and DJs’ shareholders to go ahead and the South African firm is confident its investors will back an Australian expansion, with its largest shareholder lending its support.

In energy, Nexus Energy has outlined the desperate need for shareholders to accept a lowball bid for the firm from Seven Group, admitting that if the deal breaks down, it will be forced into administration. Seven has already purchased over two-thirds of Nexus’ senior debt to ensure the firm stays afloat until a deal can be completed in June.

Finally, Challenger Life will pay about $240m to acquire the 41.3 per cent of Challenger Diversified Property Group that it does not own, while Seek has spent $5.3m to claim 25 per cent of Bangladesh’s leading online jobs marketplace, bdjobs.com. It follows quickly on the heels of Seek’s $580m acquisition of Malaysian-based JobStreet in February.