DataRoom AM: Transfield stumbling block

When Ferrovial lobbed its $1 billion bid for Transfield Services last month, the target played hardball by rejecting the offer as too low. But now it's the Spaniards' turn to dig in.

Elsewhere, Macquarie Group appears to have a good chance at some European electricity assets, APA Group sounds optimistic as a BG Group deadline nears and Denham Capital digs for Australian mining deals.

First up, Ferrovial's proposed takeover of Transfield Services may have hit a roadblock, with reports the bidder is concerned about the terms of a confidentiality agreement that would grant it access to Transfield's data room.

According to The Australian Financial Review, Ferrovial, advised by UBS, is reluctant to continue the bidding process without a clearer picture of financial covenants on Transfield's debt funding and the terms of its contracts. But, it thinks the confidentiality agreement it received last week is too restrictive and unrealistic.

Transfield, advised by Macquarie Capital, denies there is anything unusual about the agreement, insisting it is genuinely trying to progress discussions after rejecting the indicative $1.95-a-share offer from the Spanish company in October.

The deal is sure to be a hot topic when Transfield's board fronts investors at its annual general meeting on Wednesday.

We will soon know more about Macquarie Group's expected bid for a €2.2bn ($3.14bn) portfolio of Spanish electricity assets, with binding offers due today.

A source described the silver doughnut as a “probably the front runner” in the race for the group of generators, energy retailer and distribution network owned by Germany's E.ON, according to The Australian Financial Review. Macquarie is already believed to have secured funding for an offer.

However, the local investment bank is likely to face stiff competition from private equity giant CVC and Spanish utility Endesa. Spain's Grupo Villar Mir was also reported to have been working on a joint bid with First State Investments, which is owned by Commonwealth Bank of Australia.

Also upcoming is the deadline for final bids for the $4 billion-plus pipeline being sold by BG Group in Queensland and APA Group chairman Len Bleasal certainly sounds as if he is preparing an offer.

Speaking to The Australian Financial Review four weeks before final bids are due, Bleasel notes there is “a lot of interest” in the asset. While he is restricted by confidentiality agreements from commenting on the BG process, he says APA is keen on “anything that's up for sale . . . and any opportunities to build, own and operate pipelines.”

Bleasel also told the newspaper the company was counting on strong support in debt and equity markets for any future purchases. “We're in a good position if we need to spend money,” he says.

Hong Kong's Cheung Kong and a consortium involving AMP Capital are also said to be in the running. Bidding closes on November 28.

In the resources sector, Denham Capital has its eye on a number of stalled mining projects around the country as traditional funding dries up.

The private equity group is pouring $US130 million ($147.74m) into a new business, Auctus Minerals, which is looking for development-ready mining projects struggling to raise cash, The Australian reports. Of the roughly 1,000 projects Auctus has already assessed, it has narrowed its list to several possible ventures -- though no names are being named.

Auctus is headed by former Karara Mining chief Steve Murdoch, who has also enlisted former Karara chief ­financial officer Paul Sims and another colleague from Cape, Terry O'Connor.

Meanwhile, Nine Entertainment has hired Greenhill & Co to advise on its potential bid for outdoor advertising group oOh!Merida, according to the Australian Financial Review. Current owner Champ is not believed to have ruled out an IPO if talks fall through.

Finally, Spotless Group's acquisition of ACG's customer contracts and associated assets could be a signal that newly listed companies on the ASX have a good appetite for making acquisitions after their IPO. Other debutantes to watch are Healthscope, SG Fleet and Estia Health.