Suitors weighing the sale documents for GE’s local consumer lending business have been surprised by the extent of the division’s profitability, leaving the prospect for a much higher asking price than first expected.
Elsewhere, infrastructure investors line up to make a play for the Port of Melbourne, Medibank Private readies to light up ASX boards today, and consultancy firm Cardno braces for a takeover approach.
The auction of GE’s Australian and New Zealand consumer lending business has already taken a twist as pricing expectations double from $1 billion to $2bn. The news likely rules out a play from locally-listed suitor FlexiGroup and brings into focus the likelihood of a joint venture winning the day.
A number of firms are already likely chasing a JV agreement, with TPG Capital seen potentially agreeing to a deal with either Macquarie Group or Blackstone. The latter two may also opt to work together, while Wesfarmers, KKR, Pepper Australia and York Capital are also on the long list of prospective buyers. However, the big four banks remain unlikely starters.
Meanwhile, IFM Investors has called on advice from JPMorgan and Barclays Capital as it eyes off the lucrative lease at the $5bn-plus Port of Melbourne, according to The Australian Financial Review. The planned privatisation of the nation’s busiest port next year has already seen Hastings Funds Management and a consortium headed by QIC hire advisers as infrastructure investors jostle for position before the starting gun is fired.
In the IPO market, all eyes will be on Medibank Private today as it debuts on the ASX. Retail investors, who paid $2 a share in the offering, are set to collect a tidy profit as expectations are high the firm’s stock will rise above $2.20 amid a buyer feeding frenzy.
The Medibank good fortune comes as another IPO candidate falls on hard times, with fast-food chain Pie Face entering voluntary administration. It leaves several big name investors -- including casino mogul Steve Wynn and local rich lister Brett Blundy -- in the red, though founder Wayne Homschek has told Fairfax Media an IPO is still possible in 2015.
Hong Kong billionaire Tony Fung is reverting to plan B for his proposed $8bn Yorkey’s Knob casino after the breakdown of a $217m deal to buy Reef Casino Trust, the owner of Cairns’ Reef Hotel Casino. Fung will now seek a HK listing for Casino Canberra -- which he is currently in the process of buying for $6m -- before using it as a vehicle to raise funds for Yorkey’s Knob.
In insurance, the Territory Insurance Office (TIO) has been offloaded by the NT government for $424m. The widely anticipated sale will see Allianz claim the insurance operations and People’s Choice take over the banking component.
Elsewhere, consultancy firm Cardno has tapped UBS to guard it against predators as it fears a low-ball bid will be forthcoming shortly, the AFR reports. The fear is driven by the retreat in its stock price to a four-year low, with Jacobs Engineering among possible suitors.
Finally, Paladin Energy has detailed plans to raise $205m and bring in Chinese private equity firm Hopu Investments as a significant shareholder, while speculation of a $1bn float of poultry giant Inghams Enterprises is gathering momentum.