DataRoom AM: Qantas catch

Plans to change the Qantas Sale Act may not pass the Senate, while Transpacific Industries offloads its NZ assets.

The Abbott government has backed a removal of special foreign ownership restrictions on Qantas Airways, but even the national carrier fears it will mean nothing. The airline has essentially won the most recent battle in a war that appears beyond it -- at least in the short term.

Elsewhere, Transpacific Industries offloads its New Zealand business for just shy of $1 billion, the ACCC gears up for a ruling on AGL Energy’s Macquarie Generation buy and a Lorna Jane IPO is taken off the 2014 agenda.

The Abbott government will push forward with changes to the Qantas Sale Act that will see foreign ownership restrictions for the national carrier watered down to match those of other airlines. The news means Qantas Airways can follow in Virgin Australia’s footsteps to split its domestic and international operations and encourage significant offshore stakeholders.

Two questions remain: will it pass the Senate, and are there any foreign investors interested? The answer to the first question appears a definite no -- at least, not until the new Senate sits in July -- while doubts must be raised as to which companies would want a slice of Qantas. Other airlines have shown scant interest, though private equity firms might take a second glance.

Transpacific Industries has divested its New Zealand business, reaping $NZ950 million ($880m) through a sale to a subsidiary of Beijing Capital Group. The long awaited deal was broadly in line with analyst valuations, leaving the ASX-listed group with the capacity to pay down debt and focus on its Australian operations. The deal will be finalised in June.

The Australian Competition and Consumer Commission will today rule on AGL Energy’s proposed $1.5 billion purchase of the New South Wales government-owned Macquarie Generation. The watchdog’s call really could go either way, but we are tipping a ruling in favour of AGL. Should the decision go against AGL, the generator will remain in government hands indefinitely.

A float of sportswear group Lorna Jane has been put on the backburner, according to The Australian Financial Review. Private equity firm Champ Ventures has been testing the waters on an ASX listing to exit its 40 per cent stake in the firm, but has decided to first push ahead with a US expansion of the business.

Also in the IPO market, private equity firm Next Capital is believed to be pressing forward with an IPO of Australia’s second largest hire firm, Onsite Rental Group. Investment banks Citi and UBS have been tapped to gauge interest in a float, though a lack of market interest in rival Coates Hire last year doesn’t bode well for a positive outcome.

Meanwhile, the NZ government-owned Genesis Energy will list in New Zealand and Australia on April 17, according to the AFR. The asset could raise around $700m should the government decide to hive off a 49 per cent stake.

Finally, Macquarie Capital is mulling the purchase of a stake in Sydney-based Logos Property. The investment bank is raising capital for the asset manager and if all goes well on that front, it is likely to claim a slice of the company to call its own, the AFR said.

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