DataRoom AM: Tepid Ten offer

Ten Network has received only one low-ball bid, while a major investor in Nine Entertainment could soon offload a sizable stake in the media company.

For all the talk of multiple suitors throwing their hats in the ring in the potential auction of Ten Network, only one bid will be forthcoming by the deadline set by Ten’s advisers. And the offer price seems a long way from where key investors could conceivably consider selling.

Elsewhere, luxury goods giant LVMH claims a healthy slice of Seafolly, a Nine Entertainment block trade firms as a probable outcome in the next three months, Duet Group seeks a fresh deal with Fortescue Metals Group and APA Group readies for a $1 billion-plus raising.

The consortium of Discovery Communications and Foxtel represents the only confirmed bidder in the fight for Ten Networkreportedly lobbing a 20-25c a share offer the way of Ten’s board this week. The cash-and-scrip proposal offers no premium to shareholders and is considered short of the valuation ascribed by key Ten investors, with Discovery and Foxtel putting forward the lowball $600 million bid upon realising rivals would not show up to the auction.

Indeed, rampant speculation of private equity interest may have been a fabrication, with the latest talk being that Ten leaked information about prospective buyers to media outlets in a bid to give the illusion of a heated takeover battle.

Also in media, Nine Entertainment could be home to a major block trade either side of Christmas, with speculation of a stock sell off ramping up in the past week. Apollo Global Management has long been seen as a seller at the right price and despite market volatility, is likely to offload $250m worth of stock within the next three months. The mooted deal will leave Apollo with half of its current 36 per cent stake.

Meanwhile, a majority stake in swimwear group Seafolly has been sold to the private equity division of luxury brands group LVMH for over $80m. The deal leaves the founders with 20 per cent and was made at a valuation north of $100m, according to The Australian Financial Review.

In infrastructure, Duet Group is hoping to strike a $400m deal with Fortescue Metals Group for a natural gas pipeline extension. Duet has nearly completed a pipeline for Fortescue in WA and the prospect of an extension appears high. It will, however, be a matter of cost for the iron ore miner, which has been hit hard by commodity price weakness this year.

The development comes amid an auction of BG Group’s $4bn gas pipeline in Queensland that could see APA Group rattle the tin for as much as $1.5bn. APA is considered the frontrunner in the auction, but will need a healthy capital injection to get a deal done.

Also in infrastructure, Ferrovial’s takeover proposal for Transfield Services is looking hard to ignore now that Transfield stock has slumped to $1.75, more than 10 per cent below the $1.95 offer price. Just a month ago it seemed that Ferrovial had no chance of a deal without raising its bid above $2 a share, but the tables have turned rather swiftly.

Elsewhere, final bids have rolled in for Apache Energy’s stake in the Wheatstone LNG project, with Woodside Petroleum seen by the AFR to be fighting just one other suitor on the deal. The auction comes at an awkward time as oil price weakness dents energy asset valuations.

In the IPO market, Quadrant Private Equity is seen preparing for a $300m float of Icon Cancer Care late next year, while Evolve Salons could list with a valuation of over $100m in the first quarter of 2015, according to the AFR.

Finally, Spotless has confirmed major shareholder Pacific Equity Partners has sold around $200m worth of stock, while the AFR reports that three parties are expected to bid over $60m for control of real estate group LJ Hooker.