DataRoom AM: Yancoal control

Yancoal moves closer to a Chinese takeover, while Ten Network's biggest shareholder is determined to keep the media group in Australian hands.

Local coal giant Yancoal could again be edging close to a Chinese takeover as its majority shareholder pursues a bold debt deal that could lift its stake within touching distance of compulsory acquisition territory.

Elsewhere, the plot thickens again at Ten Network, Great Southern Rail gets placed on the chopping block and AusNet positions for a tilt at east coast power assets.

Yanzhou’s long, and at times messy, push to gain full control of Australian-listed Yancoal may again be nearing an endpoint as the Chinese firm takes on $US1.8 billion of a $US2.3bn debt deal. The raising is open to all Yancoal shareholders to participate, but should others opt out, Yanzhou could raise its stake from 78 per cent to 89.5 per cent, desperately close to the 90 per cent threshold.

The dilutive raising comes after Yanzhou abandoned a bid for Yancoal earlier this year and will likely raise the ire of Noble Group, which holds over 13 per cent of Yancoal stock.

Meanwhile, the chances of a deal for Ten Network have received a blow as key shareholder Bruce Gordon insists he holds no plans to sell his 14.9 per cent stake. The media group’s adviser Citi is still weighing several approaches. The latest speculation is focussing on a bid from US private equity firm Hellman & Friedman that will likely include a role for former Ten boss Grant Blackley.

Other firms linked to a $700 million takeover include Fairfax MediaTime WarnerProvidence Equity Partners and Foxtel, in combination with Discovery Communications.

Also in media, today’s listing of APN Outdoor is seen as a key to a possible float of rival oOh!Media. A positive day will put an IPO of oOh!Media firmly on the agenda despite interest in a takeover from Nine Entertainment.

Offshore, British outsourcing firm Serco Group has taken a hefty financial blow after losing an Australian Defence contract among a list of impairments, with the news forcing it to weigh asset sales, including its Great Southern Rail business in Australia. Great Southern -- which operates The Ghan, The Overland and Indian Pacific trains -- was acquired in its entirety by Serco in 1999.

In energy, AusNet has begun assessing options to join the running for the auction of ‘poles and wires’ assets in NSW and Queensland next year. According to The Australian Financial Review, AusNet is laying the groundwork for a purchase as local rivals DUET Group and Spark Infrastructure and offshore giants Singapore PowerChina’s State Grid and Cheung Kong Infrastructure weigh their options.

In the IPO market, vacuum retailer Godfreys will lodge its prospectus on November 21 ahead of its $100m listing in mid-December, while fellow IPO candidate Tasman Lifestyle has pulled the pin on a float due to soft investor demand. Tasman Lifestyle, a $100m-plus housing park company owned by the Ingham family, was expected to list pre-Christmas.

Elsewhere, online sports retailer SurfStitch is set to meet fund managers next week to drum up support for a planned IPO that could value the group at as much as $450m. The firm will likely hit ASX boards in mid-December after a late-November bookbuild.

In energy, China’s Fosun is set to retain a Friday deadline for acceptances of its Roc Oil takeover offer despite remaining well short of the 90 per cent threshold. According to the AFR, Fosun is happy to sit on whatever stake it holds come deadline day, with a level around 80 per cent likely.

Finally, Evolve Education has detailed plans for a $120m dual-listing in Australia and New Zealand, while fashion retailer Noni B will retain a spot on ASX boards after 12 per cent shareholder Gannet Capital opted not to sell into the offer put forward by Alceon Group. The news leaves Alceon with a 78 per cent stake, short of the 90 per cent compulsory purchase level.