DataRoom AM: Stalking DJs

The shadow of Solomon Lew continues to loom large over the proposed takeover of David Jones as the retail billionaire reportedly makes yet another raid on the department store operator’s shares.

Elsewhere, the race for Aquila Resources takes yet another, potentially decisive, twist, Frank Lowy receives some great news on his bold restructure plans and the IPO market hits a minor bump.

Solomon Lew is refusing to let the $2.15 billion David Jones takeover proceed quietly, reportedly completing yet another significant acquisition of the firm’s stock. By all reports, the retail heavyweight now has at least 5 per cent of DJs securities after heavy buying yesterday, and it’s possible his voting rights could even be above 10 per cent.

DJs and suitor Woolworths have indicated they are unaware of Lew’s intentions, but it appears clear he has some sort of plan afoot. It ensures plenty of intrigue to what otherwise would be a straightforward deal, with Lew potentially within a few per cent of a level of ownership that could scupper the takeover at the June 30 vote.

The plot is also thickening at Aquila Resources as it appears likely a rival bid for the miner will be forthcoming from Mineral Resources on Wednesday. Both firms entered trading halts yesterday ahead of a “potential corporate transaction”, with an offer from Mineral Resources seen as a near certainty.

Last month China’s Baosteel put forward a $1.4bn all-cash proposal to Aquila, which the target’s board has hinted it will reject. With that deal now seemingly on the canvas, Mineral Resources appears set to swoop after surprisingly claiming a 12 per cent stake in Aquila last week. The major issue for the likely suitor is that its value is less than 50 per cent above the target, leaving the prospect of an all-cash deal a remote possibility. Instead, a $1.5bn-plus all-scrip or partial-scrip bid is probable.

In property, Frank Lowy may finally get his way on the $70bn restructure of his property empire as several Westfield Retail Trust shareholders end their resistance to the deal. According to The Australian Financial Review, three stakeholders with holdings of over 1 per cent combined have changed their vote, meaning the restructure could just sneak past the 75 per cent threshold needed for the plans to proceed.

Lowy is looking to combine Westfield Group and WRT and then split the two entities into a group focussed on Australia and New Zealand (Scentre) and a company largely concentrated in the UK and US (Westfield Corporation).

Elsewhere, UGL yesterday confirmed the $1.215bn sale of its property services arm, DTZ, to TPG Capital, PAG Asia Capital and Ontario Teachers’ Pension Plan. The deal is expected to conclude in September, with UGL tipped to use the proceeds on acquisitions.

In the IPO market, PAS Group has battled through a disappointing first day’s trade, losing almost 20 per cent of its value. The fashion retailer and wholesaler raised $120.5m through the sale of 85 per cent of the business and its poor performance represents a rare disappointment for a new listing over the past couple of months.

The floats of Mantra Group, Monash IVF and Asaleo Care over the next fortnight will offer a strong guide as to whether the PAS struggles were just a blip or a sign of a cooling IPO market.

Meanwhile, New Zealand equipment hire group Hirepool has lodged its prospectus for a planned dual-listing on the ASX and NZX. The firm is hoping to raise close to $250 million in the float prior to hitting market boards on July 11.

Elsewhere, Smartgroup is set to raise $112.7m through its float, its prospectus shows, leaving it with a market cap of about $160m.

Finally, the nation’s largest pet care company, Greencross, has secured a deal to purchase WA-based City Farmers for $205m from Quadrant Private Equity. The takeover will be partially funded by a $120m capital raising.