DataRoom AM: Treasury Wine tussle

KKR emerges as the frontrunner for Treasury Wine Estates, while the impending float of Medibank moves a step closer.

The fight for control of Treasury Wine Estates has led to formal bids from both KKR and TPG Capital -- but which private equity firm has taken the front seat on the deal?

Elsewhere, the prospect of a takeover bid for Ten Network grows, Medibank Private takes a big step towards its ASX listing and Leighton Holdings makes significant progress in its mass asset sell-off.

After a long due diligence process, both of Treasury Wine Estates’ suitors have reportedly lodged formal scheme of arrangement proposals. The deals were put forward late on Friday, with Treasury likely to give its backing to an offer from KKR in preference to a rival bid from TPG, according to The Australian Financial Review.

The pricing details are still murky, but it has been reported that KKR’s final offer – lodged with junior JV partner Rhone Capital – is significantly higher than TPG’s bid and almost certainly at, or above, the $3.4 billion, $5.20 a share indicative proposal it announced in August. An announcement from TWE could be seen today.

Meanwhile, the $4bn float of Medibank Private has moved another step closer after the government opened the pre-registration process for retail investors over the weekend. Pre-registration will close on October 15 ahead of the release of the prospectus in late October, with the biggest listing of the year tipped for late November or early December.

Also in the IPO market, well-known investor Simon Marais, of fund manager Allan Gray, has offered his backing to a potential float of Huon Aquaculture. The salmon producer is expected to lodge a prospectus within the next week ahead of a listing that could raise $150 million and value the firm at $450m.

Another firm pursuing a late-2014 listing is APN Outdoor, with the advertising group beginning a roadshow next week, according to the AFR. The firm’s owner, Quadrant Private Equity, is hoping for a $500m valuation.

In media, Providence Equity Partners has tapped Deutsche Bank to advise on a possible bid for Ten Network, the AFR reports. Ten is believed open to a bid at the right price, with the US private equity firm the latest to have tested the waters on a deal following interest from UK’s ITV. US media firm Viacom is also rumoured to be circling, while Foxtel may be open to a minority stake as a partner with Providence.

Elsewhere, China Communications Construction Company has stepped up its chase for Leighton-owned contractor John Holland by engaging Morgan Stanley on the deal. Competition for the $1bn-plus business is most likely to come from Korea’s Samsung. It comes amid reports Singapore’s City Developments is closing in on a purchase of Leighton Properties and Spain’s Ferrovial is nearing a $300-$500m acquisition of Leighton’s services assets.

In resources, private equity firm Denham Capital has given notice of plans to launch a $200m company that will focus on buying into distressed Australian mining assets. Denham sees an industry laden with inefficient companies ripe for a turnaround.

Finally, at least five prospective buyers of Menora Foods are believed to have entered due diligence on a $100m takeover ahead of a sale before year’s end, while property developer Grocon has offloaded two lots at the former CUB site in Melbourne for $60m to a Chinese firm.

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