DataRoom AM: Santos in the target zone

The oil and gas giant has been linked to a possible bid for Senex, but could find itself a takeover target, while the NSW government has put more assets on the sale block.

The oil and gas sector, recently hit by a retreat in energy prices, could be ripe for consolidation, with Santos potentially at the forefront. But will the ASX-listed giant turn predator or prey?

Elsewhere, the NSW government adds to its ever-growing list of privatisation options, WiseTech Global looks to cash in on the IPO buzz and talk of a float of National Australia Bank’s UK operations again bubbles to the surface.

Santos is tipped by The Australian Financial Review to be taking the microscope to Senex Energy amid speculation of consolidation in the oil and gas sector. The potential for M&A activity certainly appears high given stunning oil price weakness, but just where it will take place is unknown, with the report also suggesting Santos itself could become a target.

The South Australian firm has lost over 20 per cent of its value over the last three months and is now dangerously close to a two-year low. In other words, if predators are lurking, there may be no better time to bid than the present. Santos has, however, been considered ripe for the picking since the SA government removed a 15 per cent ownership cap six years ago, with long-running speculation of Chevron and ExxonMobil interest so far amounting to nothing.

Meanwhile, the NSW government has extended its asset sale list, placing the NSW Lands Office on the chopping block. JPMorgan has been tapped to run a scoping study on the real estate records keeper, with a valuation likely to be in the hundreds of millions. Computershare has been labelled as a likely suitor, but it is early days in the process.

In the IPO market, software developer WiseTech Global is set to appoint advisers for a planned $1 billion float next year. According to the AFR, WiseTech will sign off on its advisers this week, with Macquarie Capital among the favoured contenders.

Elsewhere, Medibank Private enjoyed a solid first day of trade, ending 7 per cent higher after threatening a double-digit percentage boost early in the session. The move has mum and dad investors firmly in the black, but leaves a question mark about how Medibank will justify its lofty valuation, with the firm confirming it will not chase growth via acquisition.

Last year’s IPO darling OzForex could again turn into a river of gold for investment bankers as they look to coerce a block trade worth about $46 million from founders Gary Lord and Matthew Gilmour. The AFR reports that several banks have begun pitching for the sale of 8 per cent of the firm after a voluntary escrow period lapsed this week.

In insurance, the Northern Territory government has successfully ushered legislation through parliament that will allow it to conclude a sale of state-owned insurer TIO. It leaves little in the way of hurdles to German firm Allianz claiming TIO’s insurance arm for $236m and People’s Choice claiming the banking operations for $48m.

In finance, rumours of an imminent UK exit for National Australia Bank have again gathered steam, with reports the local bank has hired Morgan Stanley to run an IPO of the Yorkshire and Clydesdale banks next year.

Finally, private equity firm Blackstone has secured a $150m stake in WA-based retirement park developer National Lifestyle Villages, while Toll Holdings has made an array of offshore deals to simplify its portfolio and bring in over $100m in proceeds.

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