DataRoom AM: Offloading Investa

Morgan Stanley looks to divest its Investa property platform, while education firms scramble to pick up assets from crisis-hit Vocation.

Morgan Stanley continues to position for a divestment of its giant Investa property platform in what is shaping up as one of the biggest deals of the year. Any transaction will be complex, but the platform is still likely to stir interest from the major local property players.

Elsewhere, Vocation and OZ Minerals put asset sales on the agenda, Bradken’s stock gets smashed after a takeover attempt fails and Bindaree Beef draws M&A attention.

Morgan Stanley Real Estate remains intent on divesting its $9 billion Investa platform, with a roadshow slated to begin in coming months. The investment bank is seen as being close to finalising details around pre-emptive rights amid a complicated deal that will involve Investa’s managed funds, Investa Commercial Property Fund and the ASX-listed Investa Office Fund. The latter is seen likely to buy its management rights for as much as $200m.

The broader business, however, is likely to draw interest from local players Dexus Property GroupStocklandCharter Hall and Mirvac as well as a host of giant offshore players.

In education, crisis-hit Vocation has placed its assets on the chopping block as it seeks to dig itself out of a financial hole, with a merger or recapitalisation also under consideration. A deal of some sort is expected in a matter of weeks and predators -- likely including IntueriACNEvocca College and  L'Oréal – are seen as being particularly keen on subsidiary Endeavour Learning Group.

Miner OZ Minerals has also said it will weigh offers for assets or the entire company as it kick-starts a strategic review. The $1.1bn copper giant has shopped around the untapped Carrapateena project for the past 12 months and talks are continuing amid the possibility any deal may incorporate a stake in the entire business.

A planned $872m takeover of Bradken is dead in the water, however, after suitors Bain Capital and Pacific Equity Partners opted against putting forward a final bid on Wednesday due to funding issues. The decision, flagged as a likely outcome in this column earlier in the week, still caught out investors, with Bradken stock crumbling 36 per cent on the news.

Meanwhile, leading meat processor Bindaree Beef has tapped PwC to find a strategic investor to inject $100m into the business, according to The Australian Financial Review. First round bids are sought by the end of next month, with some speculating the process may lead to a $500m play for control of the whole company.

In infrastructure, the Queensland opposition has hit out against the asset sales program of the Newman government, arguing the $37bn in planned proceeds are little more than “fantasy” at this stage. The government, for its part, is adamant $37bn is on the conservative side for a selection of port and power infrastructure leases, with some suggestions the proceeds could even edge close to $50bn despite concerns over the lease length.           

Elsewhere, speculation surrounding the future of Chevron’s 50 per cent stake in Caltex has again ignited as its stock in the $9bn ASX-listed group holds near a record high. Chevron has spurned several pushes from investment banks to sell down its stake through a block trade in recent years, but its focus on cost-cutting may lead it to finally cash in some of its chips this year.

Finally, Colonial First State has secured $1.1bn in additional capital for its European Diversified Infrastructure Fund, while the AFR reports that investment banks are eyeing off a potential block trade at Mantra Group, with UBS and CVC Asia Pacific now able to sell a quarter of their stakes.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles