DataRoom AM: Transfield tension

Spain's Ferrovial may abandon efforts to buy Transfield Services as tensions between the two parties intensify, while Leighton’s sale of John Holland attracts another offer.

Transfield has held steadfast against approaches from suitor Ferrovial to gain full access to its books, but could the move come back to bite?

Elsewhere, Leighton’s sale of John Holland draws three firm offers, the James Packer-backed CatchOfTheDay joins the crowded IPO pipeline and Macquarie Group divests much of its stake in ANZ Terminals. 

Spain’s Ferrovial is believed to be strongly weighing a move to step away from its $1 billion bid for Transfield Services as tensions between the two parties intensify over access to the target’s more sensitive contracts. Transfield’s board is expected to outline its objections to the Ferrovial bid at its AGM today, with a stern response potentially scaring its suitor away.

Transfield stock has fallen 5 per cent from the initial bid price in the past week and a heavier fall awaits should the deal be abandoned. If so, it will ramp up the pressure on Transfield management to ensure financial performance at least matches expectations for the coming year.

If Ferrovial departs the scene it will be the second time it has walked away from an Australian deal this year after opting to abort a $1bn-$1.5bn play for Leighton Holdings’ John Holland operation, which is now in the sights of Brisbane’s ATEC Rail Group. According to The Australian Financial Review, ATEC has put forward a final bid in hopes of outflanking remaining suitors Samsung and China Communications Construction Company, with a preferred buyer tipped to be selected by the end of the week.

In the IPO market, retail deal website CatchOfTheDay is likely to hit ASX boards in 2015 via parent company The Catch Group, potentially offering a big payday for shareholders such as casino mogul James Packer and Seek boss Andrew Bassat. It will add to the strong $5bn IPO pipeline for next year, with the likes of GenesisCareHoytsSuper A-Mart andMYOB set to list.

Meanwhile, Macquarie Group has offloaded 80 per cent of ANZ Terminals to a syndicate including Palisade and Colonial First State, the AFR reports. The move has been made just four months after Macquarie paid $525m for ANZ Terminals, with Macquarie to retain 20 per cent and management rights for the next three years.

In media, Seven West Media is rumoured to be closing in on a streaming joint venture with pay TV operator Foxtel. The potential 50:50 deal, according to the AFR, could be agreed this month as the two firms look to challenge next year’s Australian launch of Netflix and the JV of Nine Entertainment and Fairfax Media.

Elsewhere, final offers for Orica’s non-mining chemicals division are likely to fall short of the firm’s expectations as remaining suitors Bain Capital and Blackstone Group battle to sort out leveraged financing to make a deal viable, according to the AFR. It leaves the Orica division almost certain to be spun-off as a separate vehicle on the ASX.

Finally, dental chain Pacific Smiles has priced its shares for its debut on the ASX, entering life as a listed company with a $200m valuation, while New Zealand regulators have given a belated all-clear to Expedia’s $700m takeover of ASX-listed travel website Wotif.