DataRoom AM: TPG's grand plans

TPG Capital is thinking big with a reported play for UGL, while the sale of GE Capital’s consumer lending arm may soon attract more smaller parties.


TPG most recently made waves in Australia when leading a consortium to the successful $1.2 billion bid for UGL’s DTZ division, but there could be much bigger plans afoot.

Elsewhere, more interest is sought in GE Capital’s consumer lending business, brokers worry about Medibank Private allocations and Asciano holds fire on a partial divestment of its Patrick ports division.

Private equity giant TPG Capital is believed to be gearing up to make a big splash in the Australian M&A space, with expectations it could launch a full bid for billion-dollar engineering firm UGL, just a month after it secured control of its property services division for $1.2bn. If UGL was added to Leighton’s services assets -- which TPG is believed to be leading the race for in a long-running auction -- then TPG could have significant scale for its local operations.

Meanwhile, Morgan Stanley and Credit Suisse are getting creative with the planned sale of GE Capital’s $1bn consumer lending business in Australia, offering to provide financing for smaller suitors. Funding fears have left the big end of town as the most likely bidders, with ANZ and Westpac seen as frontrunners ahead of Macquarie Group and Pepper Australia.

Just when you think it’s all getting better for former rich-lister Nathan Tinkler, something goes amiss, with the latest slip the passing in at auction of four horse racing-related properties. Tinkler has seven to sell to pay off the further $6 million he owes to Gerry Harvey, with hopes they could end up leaving him with about $40m to play with once all is said and done. However, with the first four receiving offers worth just $11.6m, $40m appears optimistic.

In infrastructure, Asciano has said it will not rush a decision to sell off part of its Patrick ports division to Chinese interests. A decision could still be months away, with the big news of note yesterday that Asciano is not just dealing with China Merchants Group on a potential $1bn sale of almost half of the business.

In the IPO market, the AFR reports that retail brokers have informed clients that they will likely receive just a third of the shares they requested through the IPO of Medibank Private given strong demand. Official allocations will be declared in early November.

Elsewhere, MediaWorks has joined APN News & Media in pursuing a float in New Zealand, according to the AFR. The media firm is likely to float its operations in the first quarter of 2015 after receiving muted trade buyer interest.

In an update to a story discussed in yesterday’s column, Boart Longyear has successfully agreed to what could prove a company-saving $350m deal with distressed debt investor Centerbridge Partners. The combination of a loan and equity raising will see Centerbridge lift its stake to 19.9 per cent ahead of a potential jump to 60 per cent by Christmas, according to the AFR.

In mining, BHP Billiton has reaffirmed plans to spin-off its non-core assets at its AGM in London. Chairman Jac Nasser said it was “another step in our evolution,” with a listing still slated for the first half of 2015.

Finally, Suncorp has raised $950m through a covered bond transaction, while Huon Aquaculture has enjoyed a strong first day of trade on the ASX, jumping 5 per cent on its debut.