DataRoom AM: Slick moves

PNG shuts the door on an Oil Search stake sale, but Woodside still eyes investment in the country.

The Papua New Guinea government has found a way to retain its stake in the ASX-listed Oil Search, but will the move pave the road for takeover activity? It’s not the only big news in PNG, with Woodside Petroleum, Oil Search and Santos Limited seen scrapping for a slice of InterOil’s giant projects in the region.

Elsewhere, the ACCC hints at turning the three-horse race for Macquarie Generation on its head, Billabong International considers offloading its online retail companies and another Australian agribusiness group gets snapped up.

The Papua New Guinea government has raised $1.68 billion to pay off a bond issued to an Abu Dhabi wealth fund rather than yield its 14.6 per cent stake in Australia’s Oil Search, according to Reuters. ExxonMobil, Royal Dutch Shell, Woodside Petroleum and Total SA have all previously been floated as suitors for Oil Search and the development opens the door for them to directly negotiate with PNG should they desire a large slice of the company.

Any deal would likely require a premium of around 30 per cent to the current stock price.

Sticking to PNG, Woodside Petroleum is considered keen to finally make an investment in the region, but perhaps not via Oil Search. According to The Australian Financial Review, Woodside is in discussions with InterOil to claim a stake in the Elk and Antelope gas fields. The Perth-based firm is seen competing with Oil Search and, potentially, Santos Limited to secure a minority position, likely from InterOil’s JV partner Total.

The Australian Competition and Consumer Commission has thrown a spanner in the works for the auction of Macquarie Generation, outlining “real concern” about the bid of AGL Energy and delaying its final decision yesterday. AGL is widely considered the frontrunner for the $1.5 billion state-owned company ahead of ASX-listed ERM Power and Japan’s Marubeni Corporation.

Billabong International has outlined plans to divest its stakes in online retail sites Surfstitch and A float may be considered for the former, of which it owns 51 per cent, while Swell, which is 100 per cent-owned by Billabong, is likely to face a trade sale. Billabong bought into both firms in 2009.

There appears no end to offshore interest in Australian agribusiness firms, with the latest acquisition that of Australia’s fifth largest grain trading company, Emerald Grain. Japan’s Sumitomo Corporation is believed to have paid around $240 million for the 50 per cent of Emerald it did not already own.

Macquarie Group is considered the frontrunner for the $3 billion-plus Australian loan book of Investec despite interest from private equity firm JC Flowers. Investec hopes to make the divestment in March, with other names previously linked to a deal including GE Capital, Pepper Australia and Bank of Queensland.

In the IPO market, clothing chain Lorna Jane could pursue a $400 million float on the ASX, according to the AFR. Champ Ventures, which owns 40 per cent of Lorna Jane, is said to be keen to exit its position. Meanwhile, childcare centre operator Sterling Education has received enough interest in a $200 million listing that it’s likely to be pushed forward to early March.

Finally, troubled Forge Group may soon offload a minority stake in its business, which would please its lender, ANZ Banking Group. ASX-listed rivals Decmil, NRW Holdings and Monadelphous Group are believed to be among a group of 10 interested parties.

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