DataRoom AM: UGL’s home stretch

UGL edges closer to wrapping up a sale of its property services arm DTZ, while Karoon Gas cheers up shareholders with a successful asset sale.

After being put on life support last month, the sale of the property services division of UGL appears set to end in success after the prime suitor offered a tidy sweetener.

Elsewhere, Karoon Gas shareholders get a rare piece of good news, debate rages over the planned Westfield Retail Trust vote and SAI Global stirs a bidding war for its assets.

The on-again, off-again sale of UGL’s property services arm looks like it might be ‘on and over’. A report in The Australian Financial Review suggests that a $1.2 billion deal with TPG Capital is imminent just weeks after the sale almost unravelled entirely when the only bid forthcoming was a $1bn proposal from TPG. At that level it was $300 million shy of where UGL hoped to reach for the DTZ business, although $1.2bn does marry with the initial price expectations of the market.

For now, UGL is coy on any deal, telling investors that no terms have been reached just yet. However, investors still sent the firm’s stock 8 per cent higher in Monday trade, though it remains over 5 per cent down on the level seen ahead of news of trouble with the deal two weeks ago.

Karoon Gas shareholders also had something to cheer yesterday as the cash-stricken firm hived off its 40 per cent stake in two Browse Basin permits to Origin Energy for up to $850m. The news sent Karoon stock up 42 per cent on the day after climbing as much as 65 per cent at one stage. Not so keen on the deal were Origin shareholders, who rushed for the exit and sent Origin stock over 3 per cent lower.

The downside for Origin was mainly in news it would tap markets for $1bn later in the year -- not exactly a bullish buy signal.

The new date to conclude a meeting of Westfield Retail Trust shareholders on the planned $70bn restructure of Frank Lowy’s Westfield empire remains up in the air, despite a push for the vote to be scrapped and restarted from scratch. As it stands, the adjourned meeting will proceed sometime in the next two weeks.

Stock in WRT rose 1.5 per cent yesterday in an odd trading day given any new shareholders will have no rights to vote on the company-defining restructure proposal.

In the IPO market, Asaleo Care (formerly SCA Hygiene) has released a prospectus for its upcoming float. The maker of Sorbent will look to raise up to $690m in a July 3 listing that will value the firm as high as $1.06bn.

Meanwhile, a $1.1bn offer from private equity firm Pacific Equity Partners for SAI Global may have kickstarted a bidding war as SAI has received a number of fresh expressions of interest since PEP’s proposal was put forward last week. The firm’s data room is now open for suitors to peruse, with SAI hoping to ignite some robust competition.

In resources, Rio Tinto has concluded the $1.1bn sale of its Clermont coal mine in Queensland. The sale will see the development fall into the hands of GS Coal, a joint venture between Glencore and Sumitomo.

Elsewhere, a curveball has been thrown in the planned sale of Nexus Energy to Seven Group. A vote on the deal is slated for June 12 but it could be thrown into disarray as Seven weighs news that Nexus’ joint venture partner in the Crux project, Shell, has lifted the projected costs for the development.

Finally, Brambles has paid $61.5m to claim German-based bulk container services firm Transpac International to aid with its European expansion plans.