DataRoom AM: Tinkler's coal countdown

Nathan Tinkler recently declared all was well with his return to the local coal scene, but that may prove a stretch as new reports emerge of financing challenges.

Elsewhere, the IPO market continues to hum along, new data show Australia’s M&A market bursting to life, James Packer moves one step closer to realising his Sydney dream and Elders admits it has received takeover approaches.

Nathan Tinkler’s planned $150 million acquisition of the Wilkie Creek coalmine in Queensland is believed to be at a crossroads after he missed a scheduled June 30 payment on the purchase. The Australian Financial Review reports that US investment bank Jefferies, which had been backing Tinkler on the deal, has sounded out the two underbidders (Stanmore Coal and a mystery private equity group), but neither are keen to raise their bids. Meanwhile, seller Peabody Energy has granted an extension to Tinkler on the deal for an unknown period of time.

In the IPO market, Link Market Services has opted to pursue a corporate restructure ahead of a possible $1 billion float, the AFR reports. The long-mooted float, which could offer a valuation on the firm of $3bn, is tipped for the 2014-15 financial year and is likely to be led by advisors at Macquarie Capital. The news comes as Healthscope progresses towards the biggest float since QR National in 2010, with the firm likely to raise about $2.5bn in a bookbuild in two weeks’ time.

Also in the IPO market, American Patriot Oil and Gas hits ASX boards today, in the first petroleum float for 12 months. The company, which will raise $8m through the listing, was put together by the founders of Ambassador Oil and Gas.

The booming IPO market isn’t the only piece of good news for investment bankers as new data has revealed local M&A activity surged 83 per cent in the first half of the year. The news will come as no surprise to readers of this column given the amount of activity we have seen this year as David Jones, Warrnambool Cheese and Butter, Treasury Wine Estates, SAI Global, Aquila Resources, Goodman Fielder, Envestra, Shell Australia, Country Road and UGL’s property division all draw attention from suitors. Interestingly, of that extensive list, SAI Global is the only one likely to remain in Australian hands.

Potentially joining that long catalogue of takeovers is Elders, which yesterday confirmed reports of renewed buyer interest. Last year, the firm dismissed an offer from Ruralco after it was the only final bidder at the end of a months-long auction process. Pacific Equity Partners, Wellard and several Asian investors have been linked to bids on this occasion, but Elders has yet to receive an offer worthy of engagement.

Leighton Holdings, on the other hand, is desperate to engage with suitors on its John Holland and Services divisions. According to the AFR, bids for the $1bn-plus assets are due on July 24, with Spain’s Ferrovial and France’s Vinci and Bouygues among the prospective buyers.

Elsewhere, James Packer’s plan for a new $1.5bn hotel and casino in Sydney has taken another step forward after Crown Resorts paid $100m for a tables-only licence at its planned Barangaroo location. The permission kicks in from November, 2019 and leaves planning approval as the last hurdle for Crown to jump.

In property, Scentre Group, the Australian and New Zealand-focused property firm formed out of the $70 billion Westfield restructure, will raise €2 billion ($2.9bn) in senior bonds to repay part of a bridge facility. It’s a strong show of investor support for the controversial new vehicle.

In infrastructure, the NSW government will decide this week on advisors for its 49 per cent sale of Ausgrid, TransGrid and Endeavour Energy.Macquarie Capital, UBS, Goldman Sachs, Lazard and Morgan Stanley are believed to be in the running for the $11bn electricity asset selloff mandate, with Morgan Stanley a frontrunner.

Finally, Macquarie Infrastructure is set to spend about $1.1bn to claim full control of International-Matex Tank Terminals eight years after it first acquired 50 per cent of the business.