DataRoom AM: Pushy Brookes

Expect David Jones to play ball with Myer Holdings as the latter reignites its merger plans for the two department store giants… but that doesn’t mean it’s a good idea. After all, how often does a merger of two struggling firms turn out for the best?

Elsewhere, Woodside Petroleum seeks clarity from its largest shareholder, Spotless Group tests the waters on a $2 billion IPO and Quadrant Private Equity progresses two floats of its own.

Myer Holdings has put the pressure on rival David Jones to engage with its merger proposal after restating the $3 billion offer yesterday. The recent buzz about the possibility of a deal and the criticism David Jones received for not engaging in October will surely see DJs give the deal more thought, but perhaps only if Myer offers something of a premium. Still, the merging of the two fading companies will do little to aid either party and may not even clear the competition watchdog hurdle.

Woodside Petroleum is urging Royal Dutch Shell to come clean on plans for its 23 per cent stake in the Australian firm. Woodside boss Peter Coleman told Bloomberg yesterday that while he had not held recent discussions with the Dutch-based oil giant, he was hopeful they would remove investor uncertainty by outlining a timeline for its planned divestment of the $7.3 billion stake.

Coleman also distanced the group from speculation it would bid for assets in Papua New Guinea, asserting that assets in the Pacific nation were “fully priced”.

Several big-ticket IPOs appear to be progressing smoothly, with Spotless Group firming as a chance to hit market boards later this year. The services firm’s owner, Pacific Equity Partners, has discussed the prospect of a $2 billion to $2.5 billion float with UBS and Citi this week, with a roadshow teed up to gauge market interest next week, according to The Australian Financial Review.

Fellow IPO candidate Burson Auto Parts is progressing even quicker, with expectations of a $300 million listing to be wrapped up by Easter (mid-April). The company’s owner, Quadrant Private Equity, has engaged advisors Morgan Stanley and UBS to pursue a final roadshow in mid-March.

Meanwhile, Quadrant’s planned May float of iSentia received a leg-up yesterday after the ACCC cleared its purchase of Australian Associated Press’ media monitoring business. The approval delay had been holding up progress on the $500 million listing. Other high-profile floats on the agenda include Medibank Private and Healthscope, with the latter seen offloading property assets ahead of an IPO.

Macquarie Group, Westpac Banking Corporation and National Australia Bank are all out of the running for Investec Australia’s $3 billion loan book, according to the AFR. Final bids are due in March with ANZ Banking Group and Bank of Queensland believed to be among a group of around five contenders.

Treasury Wine Estates’ new boss Michael Clarke is pursuing a review of its US business that will most likely lead to divestments, with the troubled company under pressure to hive off its Beringer assets. TWE remains a prime takeover target given its recent share price weakness.

Nexus Energy has knocked back a full takeover offer but remains in talks for a sale of two of its key assets: the Longtom gas project in Bass Strait and its stake in the Crux oil and gas field.

Offshore, Facebook has made a bold takeover move, claiming messaging app WhatsApp for a staggering $US19 billion ($21 billion). Like all tech deals at the moment, it seems fully priced. Elsewhere, Tesla Motors boss Elon Musk has confirmed strategic talks with Apple, though would not be drawn on whether they related to a potential takeover that could be worth upwards of $30 billion.