DataRoom AM: Santos' pipeline pressure

The oil price slide sees Santos mulling the divestment of a multi-billion dollar pipeline, while the auction process for Investa Property Group kicks off.

Santos boss David Knox has seen the blowtorch applied over the past two months amid an oil price collapse and while refuting the need to boost cash reserves, he has conceded a multi-billion dollar pipeline could be on the chopping block.

Elsewhere, the giant Investa Property Group could finally be put on the market, the race for Ten Network is simplified, and a fresh Asian opportunity pops up for ANZ Bank.

The head of energy firm SantosDavid Knox, has confirmed his company is mulling the divestment of the GLNG pipeline in Queensland. The valuable asset has been in the spotlight since BG Group sold a nearby pipeline for about $6 billion late last year, with investors seeing a similar Santos auction resolving any possible cashflow issues in the coming year. Knox, for his part, remains adamant Santos can avoid a capital raising without the pipeline auction, given $3bn of liquidity and other unspecified asset sales under consideration.

One potential issue for a pipeline divestment is the number of parties involved in the GLNG project, which makes an auction more complicated than BG’s sale. However, Knox believes BG’s success will have a positive impact in finally getting all the JV partners on the same page.

Meanwhile, Morgan Stanley is believed to have kickstarted the auction process for the $9bn Investa real estate platform, with a first-half sale on the cards. The unlisted Investa Property Group’s interests include a wholesale fund worth $3bn and an additional $3.5bn worth of property assets alongside management of the listed Investa Office FundDexus,BlackstoneCharter Hall and GPT Group have been labelled as potential suitors, while the $3.1bn IOF may also play a role in purchasing its management rights off the broader Investa platform.

In media, the race for Ten Network is tipped to be Foxtel’s to lose as The Australian Financial Review reports that other suitors, including AnchorageSaban Capital and Silver Eagle, believe they have been sidelined in talks as a deal is hashed out with Foxtel -- which wants 14.9 per cent -- and JV partner Discovery Communications. However, the prospect of no agreement may be the true frontrunner.

In finance, Royal Bank of Scotland has detailed its desire for a further retreat from the Asia-Pacific region, bringing ANZ Bank into the spotlight as a possible buyer of several assets. In 2009, ANZ bought a number of small RBS operations in Asia for about $700m as the Scottish bank retreated to its home base. Now, according to the AFR, ANZ is likely to test the waters on a new deal, though given local banks’ limited offshore success, investors will be wary.

Elsewhere, Woodside Petroleum’s $4.5bn purchase of Apache’s Wheatstone LNG stake and other energy assets remains up in the air as the ACCC weighs the competition impacts. The deal has received some criticism for its potential impact on the domestic gas market, but is likely to be waved through.

Finally, talks on a transaction between Asciano and China Merchants over the former’s Patrick ports business appear to have stalled, Australia’s Champ Private Equity is seen as a prospective $150m bidder for NZ-based wine group Yealands Estate, and Australian Careers Network has made its first deal since listing in December, paying $4.5m to secure control of Phoenix Institute of Australia

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