DataRoom AM: Wesfarmers weighs AMP

Wesfarmers is looking to expand into finance, while NAB is expected to reveal details of how it plans to offload its UK operations.

With the largely successful takeover of Coles now bedded into its fabric, WA-based conglomerate Wesfarmers is believed to be testing the waters on a deal that would shake up the finance sector and outline the true strength of its balance sheet.

Elsewhere, National Australia Bank appears ready to ditch its UK operations, Morgan Stanley weighs a complicated Investa exit and Nine Entertainment returns to the auction of oOh!Media.

Giant conglomerate Wesfarmers has reportedly begun inquiries about the worth of AMP, tapping industry sources to get a handle on the true value of the $16.7 billion wealth management firm. While a deal is not seen as imminent, the WA-based suitor is believed desperate to get a foothold in the finance sector.

Adding to the speculation is news that Wesfarmers has dropped its push for a $150 million financial licence, in a potential sign of confidence in securing a licence via acquisition, while the recent divestment of its insurance business allays competition fears.

Suncorp is also rumoured to be in Wesfarmers sights, with a buyout of either firm to cost over $20bn once a takeover premium is factored in.

Also in finance, National Australia Bank is expected to finally detail an exit plan for its $4bn UK operations to the market today. According to The Australian Financial Review, the bank will outline a long overdue divestment push for the Yorkshire and Clydesdale banks, with an IPO seen as the most likely exit route within the next six months. The lender may also officially place its $1bn local life insurance unit on the auction block.

In media, Nine Entertainment has reignited takeover talks with outdoor advertising company oOh!Media, the AFR reports. The target, majority-owned by Champ Private Equity, had been readying for an IPO, with the renewed talks with Nine perhaps an indication that valuations on the float weren’t quite what Champ had expected.

In property, Morgan Stanley is weighing an exit from Investa Property, according to the AFR. Morgan Stanley paid $4.7bn for Investa Property back in 2007 just prior to the financial crisis and it is thought that either a takeover or reverse merger with the ASX-listed Investa Office Fund -- which is currently managed by Investa Property -- could be seen in the near-term.

Also in property, UGL is tipped by the AFR to successfully conclude the $1.2bn sale of its property arm DTZ to TPG Capital before Christmas despite the uproar over claims former DTZ director (and now Hong Kong leader) CY Leung was paid to support UGL’s takeover in 2011.

Meanwhile, Pacific Equity Partners has successfully trimmed its stake in Veda after struggling to secure a deal last week. The private equity firm offloaded $220m worth of stock, reducing its stake to about 20 per cent.

In the IPO market, aged-care provider Estia could be valued at $1.2bn when it lists later this year, according to Morgan Stanley. Estia will debut on the sharemarket on December 8, with valuations ranging from $1bn to $1.2bn.

Elsewhere, Ashok Jacob has attracted a number of big names to his newly listed investment vehicle Ellerston Global Investments as Toll Holdings’ Paul Little and Wotif’s Robert Brice are listed among the biggest stockholders. The fund debuted on ASX boards last week.

Finally, the $4bn Alinta Energy has confirmed its owner is looking to sell out in 2015, while the AFR reports that Commonwealth Bank of Australia will launch a $1bn ‘tier-two’ subordinated bond to institutional investors later this week.

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