DataRoom AM: Packer's Vegas call

James Packer’s return to Las Vegas has brought about the possibility of a US-listed spinoff, with a float potentially offering one route to limit the stress on Crown Resorts’ balance sheet.

Elsewhere, Orica has no shortage of prospective buyers for its $1 billion chemicals division, Frasers Centrepoint’s bid for Australand goes down to the wire and BHP Billiton makes slow progress on its Nickel West sale.

The purchase of land on the famous Las Vegas Strip by James Packer’s Crown Resorts could lead to a new listing for the firm. Earlier this week, Crown spent $US280 million ($300m) acquiring majority control of the site formerly occupied by the New Frontier Hotel and Casino, with a new joint venture formed with Oaktree Capital as a result.

It is believed the new JV is now mulling a partial spin-off into an IPO on the Nasdaq or New York Stock Exchange in order to prevent Crown’s debt load expanding too greatly as plans progress to build a multi-billion dollar resort at the site. Given the casino owner’s proposals for significant developments in Sydney, Brisbane, Sri Lanka, Japan and Las Vegas, it’s not hard to see the logic behind a float.

Meanwhile, Orica has confirmed plans to divest its $1bn chemicals division as private equity firms circle the assets. The industrial explosives maker has reportedly held discussions with KKR, Pacific Equity Partners, The Carlyle Group and Archer Capital, though the division could also be spun-off into a separate listing on the ASX. The list of possible buyers extends to Bain Capital, Blackstone, TPG and CVC Group, but given the strength of the IPO market, it may take a strong bidding battle to prevent a listing.

In property, Frasers Centrepoint is edging closer to majority control of target Australand, but it remains locked in a race against time to get the deal through ahead of today’s 7pm deadline. As of last night Frasers held 28.65 per cent of Australand, with almost 22 per cent worth of acceptances still required. Given talk of hedge funds holding out until the last minute, there is still a decent chance of success, but there will be plenty of nerves jangling in both camps at the moment.

Another firm in a similar struggle is Hong Kong’s Cheung Kong Infrastructure, which has until the close of business tomorrow to wrap up control of Envestra. CKI is further along than Frasers however, with acceptances now approaching the 40 per cent mark and a controlling stake a very likely outcome.

Also in energy, Seven Group appears likely to waltz to control of Nexus Energy on Monday as reports emerge that key creditors Tor Investments and Och Ziff will not fight an offer to pay 74.5c in the dollar for their $37m of junior debt.

In mining, BHP Billiton’s Nickel West divestment is seen to be progressing slowly amid reports Glencore may in fact still be in the running, if aggrieved with the process. Private equity firm Apollo Global Management, meanwhile, is believed to have seen a proposal knocked back by the mining giant, while rumours have emerged of China’s Jinchuan potentially partnering with Panoramic Resources on a bid. Mick Davis’ X2 Resources has also been closely linked to the asset.

In the IPO market, two aged care providers are gearing up for a run at ASX boards after reporting season wraps up next month. Regis Aged Care and RetireAustralia, which have valuations of $800m and $600m respectively, will both list this year, following in the footsteps of successful rival Japara Healthcare.

Another IPO candidate, the Australian Pub Fund, is not yet ready to join the ASX, with chairman Geoff Dixon outlining plans to acquire more properties ahead of any float. The $200m APF is backed by high-profile investors John Singleton and Mark Carnegie and currently runs 10 pubs on Australia’s east coast.

Elsewhere, Cbus Property’s sale of two major towers in Melbourne is nearing an end, with GPT tipped to be behind a front-running $600m bid for the CBW building in Melbourne’s CBD and AMP Capital seen ahead in the race for the $400m-plus NAB office building in Melbourne’s Docklands precinct.

Finally, Ardent Leisure has detailed plans to buy Fitness First WA for $32.5m, while Alinta Energy has confirmed interest in a bid for energy retailer Lumo Energy, The Australian Financial Review reports. Competition to Alinta in the $500m auction for Lumo is likely to come from Pacific Hydro and M2 Telecommunications.