DataRoom AM: Westfield’s looming verdict

Frank Lowy’s giant Westfield restructure hangs by a thread, while Australand reviews a sweetened bid from Stockland.

It’s judgement day for the biggest restructure in Australian corporate history and the vote for a merger and split of the Westfield property empire is destined to go down to the wire.

Elsewhere, Stockland raises its bid for rival Australand, the Abbott government provides further details on its privatisation plans and the race for a new Brisbane casino thins to four.

The $70 billion restructure of Frank Lowy’s Westfield empire is hanging by a thread as varying reports filter through about a shareholder vote on a deal that would see Westfield Group and Westfield Retail Trust merge and then split into two based on geography.

The Australian Financial Review reports that the deal will still proceed despite the counting of 80 per cent of votes suggesting a dissention rate of 25.3 per cent. The deal needs 75 per cent approval to go through, which leaves it delicately poised, to say the least. Still, the fact the vote is going ahead indicates a reasonable chance of success.

Also in property, Stockland has upped its offer for rival Australand to $2.5 billion. The new ‘final’ proposal, more than a 3 per cent lift on the previous offer, is currently under review by the target’s board.

The federal government’s privatisation plans are gradually crystallising, with scoping studies of Defence Housing AustraliaAustralian Hearing, the Royal Australian Mint and the registry business of ASIC potentially getting underway in July. This will lead to a final decision on privatisation ahead of next year’s budget.

The four planned divestments join Medibank Private on the chopping block, though the Abbott government has again ruled out a sale of Australia Post and ASC (formerly Australian Submarine Corp).

Elsewhere, the race for a second casino in Brisbane is down to four after the Queensland government announced a shortlist for the Queen’s Wharf development yesterday. Local heavyweights Echo Entertainment and Crown Resorts remain, but they are expected to meet strong competition from Chinese-based Greenland Investment and a joint venture including Hong Kong’s Chow Tai Fook Enterprises and the Far East Consortium.

A decision is expected around the end of the year.

In aviation, Virgin Australia has registered the name Velocity Frequent Flyer Pty Ltd in a possible signal of intent to separate the business from its broader operations in a similar manner to rival Qantas, the AFR reports. The firm said there were no plans for a split right now, but the airline’s long-term thinking appears clear. A float or sale of the Velocity business is highly unlikely, however.

In energy, Drillsearch Energy has launched a friendly $41 million takeover of Ambassador Oil & Gas, hinting at more M&A action in the Cooper Basin. Drillsearch, Senex and Beach Energy have been labeled as likely takeover targets ahead of consolidation in the region, but little has eventuated at this stage.

Karoon Gas, meanwhile, is believed to be closing in on a sale of its $300m stake in the Poseidon gas field. According to the AFRPetroChina is in the box seat for a deal as the cash-strapped Australian firm looks to steady the ship after launching two capital raisings inside a year.

In the mining sector, the identity of a rumoured bid for Papillon Resources remains unknown, though there is strong speculation that Canada’s B2Gold has put forward a $600m-plus bid for the ASX-listed gold miner. For now Papillon is in a suspension pending the release of details on a “potential corporate transaction”.

Also in mining, Leighton Holdings subsidiary Thiess has secured a $330m contract to construct the mine process plan facilities for Gina Rinehart’s $10bn Roy Hill mine in WA.

Finally, ASX-listed Pacific Brands is drawing the attention of private equity firms, the AFR reports, with the clothing manufacturer’s troubled last few years making it an ideal target for a turnaround.