DataRoom AM: Woodside powers up

Woodside Petroleum may not have enjoyed the most successful year in M&A, having opted out of a longstanding plan to enter the massive Leviathan gas project in Israel earlier in the year, but it has at least sealed one deal to aid with its long-term growth.

Elsewhere, Leighton sees further progress on its divestment spree, investment bankers push for a sale of Santos' Queensland gas pipeline, another Chinese firm weighs up a power asset play on the nation's east coast and there is yet another twist in the GE Capital auction.

Woodside Petroleum has been under pressure all year to find new avenues of growth and it appears to have found one in the form of assets held by Apache Energy. A long-awaited deal for Apache's 13 per cent stake in the Wheatstone LNG project in WA, its 50 per cent position in Kitimat LNG in Canada and associated oil and gas acreage was formerly announced overnight.

The agreement will likely involve the Australian giant paying around $4.5 billion, perhaps at the upper end of expectations. The transaction is expected to close in the first quarter of 2015 and does not include the Phoenix South Discovery, a highly prospective acreage that was at one time rumoured to be part of any auction.

Also in energy, investment banks are preparing for the likely sale of Santos' Queensland gas pipeline in the wake of the staggering success of BG's pipeline auction last week. According to The Australian Financial Review, bankers are hopeful an auction will be kick-started early in 2015, though a deal is complicated by the pipeline's ownership as it is shared between Santos' JV partners Petronas, Total and Kogas.

The other major energy infrastructure news surrounds the privatisation of state power assets in Queensland and NSW, with the AFR reporting that China Southern Power Grid has entered the picture on any deal. The new Chinese suitor follows State Grid Corporation of China into the already crowded race as prospective buyers seek to finalise consortiums before Christmas.

Meanwhile, Leighton Holdings, fresh from the $1.15bn sale of its John Holland division last week, could offload at least another two assets in coming months. First on the block is its services division, which is being eyed off by Apollo Global Management in a deal that should be sealed this week, according to the AFR.

That divestment may be quickly followed by the sale of property developer Devine, in which Leighton holds a 50 per cent stake. It is believed that AVJennings is in the box seat on the deal, though an agreement may take until next year to be fleshed out.

In finance, the potential $2bn sale of GE Capital's local consumer lending operations is firming as a two-horse race as Deutsche joins Citi as an adviser to the FlexiGroup-led consortium. News of FlexiGroup tapping KKR and Varde Partners to combine bids pushed it into favouritism this week, but AFR assertions that The Carlyle Group may team with the Macquarie Group-Pepper Australia JV may see frontrunner status shift once more.

In the IPO market, Adairs Retail Group has been added to the list of 2015 IPO candidates as its private equity owner weighs its exit strategy. According to the AFR, Catalyst Investment Managers is hopeful of receiving a $300m-plus valuation through a float.

Elsewhere, Bradken suitors Bain Capital and Pacific Equity Partners are reportedly chasing lenders to support their $872m bid. However, concerns about the mining sector are weighing on the prospects of a suitable financing deal being reached.

Finally, Yanzhou Coal's proposed debt deal at Yancoal Australia has been blocked by the Takeovers Panel in a major setback to its takeover by stealth plan, while Recall has rejected a $2.2bn takeover from US rival Iron Mountain as investors sent its stock 5 per cent above the offer price in a sign of confidence a higher proposal will be forthcoming.