DataRoom AM: PacBrands' big plans

Speculation is swirling that Pacific Brands may be looking to offload its prized brands, while juice company nudie foods is up for sale.

It may be becoming clearer why John Pollaers left his role as the head of Pacific Brands in July as rumours swell of a push to sell off the company’s prized Bonds and Sheridan brands. On the surface such a move would appear unlikely, but asset sales of some description appear certain.

Elsewhere, nudie foods is put on the auction block, Qantas Airways appears set to avoid major structural changes, and big debt parcels swap hands on BrisConnections.

The board of Pacific Brands met yesterday to discuss the final recommendations put forward by adviser Macquarie Capital after a multi-month strategic review, a report in The Australian Financial Review suggests, with the plan considered almost certain to include the sale of brands like KingGee and Hard Yakka. The iconic names are seen likely to draw interest from Wesfarmers and Britain’s Bunzl.

However, it is speculation around the firm’s prized Sheridan and Bonds brands that is drawing the most attention amid expectations the struggling manufacturer could look to make a major play to shore up its finances. Should it take such a bold step it may lead to a break-up of the business, given Bonds and Sheridan’s combined value could be higher than Pac Brands’ $520 million market cap. An update should be forthcoming today as the firm releases its full-year results.

Meanwhile, juice maker nudie foods has been slapped with a pricetag of $60m and placed on the market by its owners, the AFR reports. Among the list of prospective buyers are Japan’s Asahi and Lion and local giant Coca-Cola Amatil, with UBS running the sales process.

In media, gossip around a possible tie-up between Fairfax Media and a free-to-air TV network shows no sign of dying down as Fairfax chair Roger Corbett steps up the sector’s push for regulatory reform. Fairfax would require the ‘two out of three’ reach rule to be scrapped in order to seal a deal with potential merger partners Nine Entertainment or Ten Network.

Corbett’s push for change comes amid revelations Fairfax and Nine weighed a merger three years ago that would have seen the enlarged company split in two based on mature and new businesses.

Investment banks have been invited to pitch for the sales mandate for BrisConnections next month, but the process may be interrupted after ANZ Bank rid itself of half of its debt exposure to the troubled toll road group, according to the AFR. ANZ is reportedly shopping around the rest of its debt in BrisConnections and may soon be joined on the sidelines by fellow debt owners Societe GeneraleDepfa BankKBC Finance and United Overseas Bank. Another member of the debt syndicate, DZ Bank, took a hit last week by selling its entire exposure to the toll road owner, with hedge funds angling for a cheap entry point.

Also in infrastructure, the New South Wales government has asked for final bids from interested parties in its Delta Coastal power generation assets. The current issues in the energy market have seen a revision to some of the valuations put forward earlier in the year, with $600m now seen as a best-case scenario as the number of bidders thins.

In aviation, Qantas Airways is tipped to largely maintain the status quo after wrapping up its strategic review. The latest speculation in the AFR indicates the national carrier will not pursue a split of its domestic and international operations, nor chase a partial sale of Jetstar Asia as it instead focuses on cost-cutting measures to repair its balance sheet.

In the IPO market, accounting software group MYOB has indicated a sale by its owner Bain Capital is not imminent despite speculation growing that Bain is looking for the exit. An IPO appears the most logical exit route, with many in the market expecting the go button to be pushed on a listing at some point next year.

Meanwhile, the owners of IPO hopeful Estia Health could push back a planned float of the aged care business to 2015 as the firm nears completion on another acquisition. According to the AFR, the deal could take Estia’s value beyond $1bn, but slow down progress on an ASX listing.

Elsewhere, it now appears certain Leighton Holdings will divest its international marine division after the construction giant hired Gresham and BNP Paribas to run a potential $200m-$400m auction.

Finally, ASX-listed Tiger Resources has made progress on a purchase of the 40 per cent stake in the Kipoi copper mine it does not own, with $120m tipped to be the end sale price, while National Storage REIT has unveiled a $46m capital raising to aid its local expansion plans.

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