DataRoom AM: Orica's chemical split

Orica seems to be favouring an IPO for its chemicals division, while two frontrunners have emerged for BHP's Nickel West unit.

Confidence of a $1 billion sale of Orica’s chemicals unit is on the wane despite a number of interested parties lobbing in first round offers on Thursday. It leaves a listing of the division on the ASX as the most likely outcome.

Elsewhere, there’s a twist in BHP Billiton’s auction of Nickel West, another suitor for BG Group’s gas pipeline assets opts out and Bradken draws a cash offer from an unknown bidder.

The auction of Orica’s $1 billion chemicals division may amount to nothing, according to The Australian Financial Review, despite a number of indicative bids flying in for the division on Thursday. It is believed that private equity firms KKR, Bain Capital, The Carlyle Group, Blackstone and Pacific Equity Partners all submitted indicative proposals, with due diligence to ramp up in a fortnight. However, Orica chairman Russell Caplan has reportedly hinted to key shareholders that a split of the business into a separate ASX company remains the best option.

Meanwhile, BHP Billiton’s auction of Nickel West may be a race in two between sector heavyweights Jinchuan Group and Glencore, even if smaller players are chasing individual assets within the business. According to the AFR, Independence Group has tapped Mincor and Panoramic Resources over the prospect of a JV to buy the Kambalda concentrator. A complete divestment of Nickel West is still seen the most likely outcome, however, with Jinchuan almost ready to lob in a bid to counter the recent $200m offer of Glencore.

In infrastructure, another contender for BG Group’s highly sought after gas pipeline assets in Queensland has dropped out of the running, with Canada’s Enbridge exiting a consortium led by Industry Funds Management. It leaves just IFM with Queensland Investment Corporation in tow as a JV partner to fight off the challenges of Cheung Kong Infrastructure and APA Group in the $4bn auction.

Elsewhere, a report in the AFR suggests Bradken has recently received a cash offer from at least one suitor, though it is unclear if there has been any further discussion of the proposal. The downturn in the iron ore market has hit a number of engineering groups, leaving them exposed to opportunistic buyers, with Bradken no exception.

In property, prominent real estate agent LJ Hooker has called on the services of investment bank Lazard to offload the iconic business. A trade sale is sought before the year is out, with a number of potential suitors already testing the waters on a deal.

In the IPO market, jewellery retailer Lovisa is believed to be preparing for a $240m float before the end of the year. Morgans and CIMB are in charge of the listing, according to the AFR, which will be in a race against the clock to get the IPO done before Christmas. Morgans, in conjunction with Moelis & Co, is also ramping up plans for a $300m IPO of Simonds Property Group.

Elsewhere, troubled investment manager van Eyk could be sold off in October, the AFR reports. Administrator Moore Stephens has received 46 expressions of interest in a positive sign for the upcoming auction.

Finally, the ACCC has given the green light to First Pacific and Wilmar’s $1.9bn acquisition of food manufacturer Goodman Fielder, while Ingenia Communities Group has seen the institutional component of its $89m capital raising come in twice oversubscribed.

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