Is Rio Tinto's decision to lift its share in Canada’s Ivanhoe Mines just the beginning of a bigger play?
Rio Tinto, Ivanhoe Mines
Global miner Rio Tinto has stoked takeover rumours by lifting its share in Canada’s Ivanhoe Mines by 2.7 per cent. While the $260 million investment figure is small, the decision to increase its interest to 22.4 per cent suggests Rio might elect to lift its stake in the Robert Friedland-backed company to 44 per cent, as per a previous agreement. Indeed, rumours surfaced recently that Rio (in much better health these days) would be best placed to acquire Ivanhoe should the Canadian giant put itself up for sale after Ivanhoe said in January it had hired bankers to assess "various corporate transactions”. Rio and Ivanhoe are behind the enormous Oyu Tolgoi copper-gold project in Mongolia, which Rio says will be producing in three years. BHP Billiton, Xstrata and Anglo American have been named as likely interested in Ivanhoe or its Oyu Tolgoi stake, while Ivanhoe has confirmed it held a "preliminary” meeting with officials from China’s Chinalco a little while ago. Many analysts suggested, however, that the banker hiring was more likely to lead to a capital raising or asset sale program to help fund Ivanhoe’s Oyu Tolgoi commitments.
A real estate investment trust spin-off might be on the cards for development and construction group Grocon. According to The Australian Financial Review, an office trust float, with slices of AXA Asia Pacific’s headquarters or Melbourne's QV project possibly included, is one option being considered by the unlisted Victorian company. A move would follow Grocon’s recent push into funds management, and an unsuccessful move alongside Oaktree Capital Management last year for the listed Multiplex Prime Property Fund. Grocon is headed by Daniel Grollo, also the national president of the Property Council of Australia.
Meanwhile, the Future Fund has shed some light on the developments over at Transurban, with managing director Paul Costello saying the joint bid for the toll road operator is definitely still in play, despite silence from key parties. The fund controversially weighed into the takeover offer last year, saying it was in talks with bidders Ontario Teachers Pension Plan and Canadian Pension Plan Investment Board over their proposal. Costello said in Melbourne yesterday the decision to comment on the $5.25 per share offer months ago only followed speculation it might turn predator for Transurban. The sovereign wealth fund also expressed an openness to partnerships with super and pension funds, and cast doubts the lifting of a six-month moratorium on a further sell down of its Telstra stake was behind recent weakness in the telco's share price.
Elsewhere in resources, and Brian Gilbertson has furthered his ambitions, with the former BHP Billiton chief and co-investors to deliver a near 50 per cent stake in a South African manganese project to Jupiter Mines in return for a majority stake in the Perth manganese and iron ore group. Under the deal, Gilbertson’s private resources investment group Pallinghurst and co-investors – including South Korean steel group POSCO and US private equity firms – will share ownership of the Tshipi project with OM Holdings, among others. Incidentally, according to The Australian, OM Holdings is desired by Ukranian billionaire Gennadiy Bogolubov, who topped Pallinghurst in the battle for Consolidated Minerals a couple of years ago.
Tatts Group is tipped to emerge winner of the NSW lotteries business, to be announced today, says the AFR. Meanwhile Anglo American has confirmed it will sell off its interest in five undeveloped coal reserves in NSW and Queensland, with Chinese entities thought to be in the running. Meanwhile, The Australian reports small miner Atrix Gold has postponed its cut-off date on a $5 million float by a few weeks to 24 March and Standard & Poor’s has tipped a "subdued” market for asset- backed securities in Australia this year, reports Bloomberg.