DataRoom AM: Seven’s Nexus steal

Seven Group looks set to snap up Nexus Energy for a bargain, while speculation mounts that Stockland could re-enter the race for Australand.

Seven Group may have been shunned by Nexus Energy shareholders in its pursuit of the local energy firm, but it will likely claim control of its target regardless.

Elsewhere, the prospect of a bidding war for Treasury Wine Estates appears remote, Frasers Centrepoint’s proposed takeover of Australand is under a cloud and Medibank Private progresses smoothly towards a fourth quarter listing.

Seven Group has all but secured control of Nexus Energy for a song, likely claiming the bankrupt firm for less than the cost of its liabilities. The deal, coming in around $180 million, is $33m cheaper than the deal offered by Seven to Nexus shareholders prior to liquidators being called in (before factoring in extra legal expenses and liquidation costs). Nexus investors knocked back that meagre deal, largely on principle, and will be left with nothing out of the latest agreement.

The sales process for Nexus, run by administrator McGrathNicol, reportedly secured just one bid despite seven firms proceeding with due diligence, leaving Seven to claim its target unopposed. The agreement still requires a vote by Nexus creditors next Monday to ensure its confirmation, but that appears a foregone conclusion given Seven is the largest creditor and can vote on the deal.

In property, D-Day is fast approaching for Frasers Centrepoint’s $2.6bn bid for Australand. The Singapore-based suitor still holds less than 10 per cent of Australand stock just two days ahead of a deadline for acceptances to reach 50 per cent. The news has again promoted speculation Stockland could re-enter the race for Australand after it was outbid by Frasers two months ago. Another theory is Pacific Alliance Group could be eyeing off a tilt after a hedge fund it manages recently joined the Australand register. PAG was linked to a takeover proposal earlier this year.

In the IPO market, the group of advisors on the federal government’s $4 billion float of Medibank Private has swelled, with Bell Potter Securities, Commonwealth BankMorgans and UBS joining as co-lead managers, while Evans and Partners and Ord Minnett have signed on as co-managers. They join DeutscheGoldman Sachs and Macquarie, who earlier obtained the lucrative roles of joint lead managers. The race is now on for a float this year, with a November listing firming as a favourite option while the IPO window remains firmly ajar.

The debut of Bellamy’s Organic yesterday serves to highlight the current strength of the IPO market, with stock in the baby food company jumping 30 per cent. The Tasmanian-based firm now has a market value of $120m.

Elsewhere, the privatisation process for Australian Hearing and Defence Housing Australia has moved another step forward after the hiring of PwC to serve as business advisor on Australian Hearing and Lazard on DHA. Herbert Smith Freehills and Ashurst will serve as legal advisors on the respective deals.

Meanwhile, the NSW government’s sale of Delta Coastal could conclude next week as the field narrows for the generation assets. It is believed that prospective bidders AGLERM PowerOrigin EnergyRatch and Marubeni are no longer involved, leaving SnowyHydro and EnergyAustralia as frontrunners for the $500m-plus asset.

The NSW government is also looking to offload the Cobbora coal project, calling for expressions of interest by September 9, according to The Australian Financial Review. The asset was first put on the market a year ago and appears unlikely to draw much interest given current weak coal market conditions.

Finally, a $3.4bn bid for Treasury Wine Estates from KKR and Rhone Capital earlier this week saw the ‘for sale’ sign put up by the local winemaker, but the auction will likely be a one bid show after the name most closely linked to a rival offer denied any interest. China’s Bright Food Group, which had previously hinted it was weighing an offer, said the lift in the offer price ruled it out of the running. 

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