The falling Australian dollar is seemingly bringing local M&A activity back to life as overseas suitors eye off some markedly cheaper options. The latest example comes in the form of Brambles offshoot Recall, which has received an opportunistic bid from a longtime courter.
Elsewhere, Asciano’s freight rail division draws buyer interest, another twist is seen in the race for GE Capital’s consumer lending operation and a Malaysian heavyweight joins the Alinta Energy auction.
Data management firm Recall has received an offer from US-based rival Iron Mountain in recent days after speculation suggested a bid was imminent back in September. The reported proposal -- around $2.2 billion -- offers less than a 10 per cent premium on Recall’s last traded price, with the scant premium seen almost certain to result in a rejection from the Recall board this week.
It should be noted, however, that the $2.2bn bid provides a 28 per cent boost to Recall’s valuation compared to where it traded before speculation of a takeover first came to light, meaning Iron Mountain may not be prepared to go too much further in its valuation despite reported synergies in the order of $200 million-plus.
Another local firm drawing offshore interest is logistics heavyweight Asciano, which reportedly could sell parts of its freight rail business. The Australian Financial Review reports that Union Pacific and Burlington Northern Santa Fe have run their eyes over parts of the Asciano division, while fellow US-based firm Genesee & Wyoming could make a play for the intermodal and bulk haulage business.
The talk comes as negotiations on a partial sale of Asciano’s Patrick ports business continue with China Merchants.
Meanwhile, the $2.5bn-plus sale of Alinta has drawn interest from Malaysia’s Malakoff Corporation ahead of a formal auction next year. The Malaysian giant has reportedly tapped local contacts to help it get a better grasp of the Alinta business and it’s seen interested enough to potentially challenge the likes of AGL, Origin Energy and Japan’s Marubeni in the race.
The Alinta development comes as the much smaller Pacific Energy gets added to the takeover target list. A major shareholder in the ASX-listed Pacific Energy is seen hunting down an exit, with a push to take the $160m firm private potentially on the cards.
In finance, the battle for control of GE Capital’s $7bn local consumer lending portfolio has taken yet another turn as ASX-listed FlexiGroup has now joined with both KKR and Varde on a bid, according to the AFR. The new consortium could now be considered the frontrunner ahead of JV partners Pepper Australia and Macquarie Bank.
Elsewhere, the ever-acquisitive Retail Food Group may have another company in its sights, with rumours it could make an offer for troubled franchise Pie Face. RFG reportedly sees potential in expanding its food franchise network, potentially resulting in a bid to Pie Face’s administrators.
Finally, Leighton has confirmed the $1.15bn sale of contractor John Holland to China Communications Construction Company, while ASX hopeful LatAm Auto has secured $18m in funding ahead of its planned ASX listing on Wednesday.