BREAKFAST DEALS: Resourcehouse reservations
Send your tips to deals@businessspectator.com.au and don’t forget to watch Deals TV for new rumours and reports later on this morning. Plus, you can follow us at www.twitter.com/WheelsDeals
A significant stake in Arrow Energy is up for grabs, but Woodside is definitely not. Meanwhile, Queensland Investment Corp eyes property acquisitions in Australia, the US and the UK and Forrest says he will avoid the Resourcehouse IPO.
Andrew Forrest and Resourcehouse
Andrew Forrest has poured cold water on Clive Palmer’s upcoming Resourcehouse float, telling Eureka Report: “I’m not a seller. I prefer to build a business. Clive has done a good job working up interest in his float. If it makes him extremely rich then he will have achieved what he set out to do.” The Fortescue Metals Group chief also reported strong demand for Australian iron ore, saying he was getting as many phone calls nowadays as he did during the boom. “Asia really only needs the US and Europe to tick over,” he said. “The growth for years to come is in Asia.” Macquarie and UBS are co-lead managers of Resourcehouse’s $3 billion Hong Kong IPO. It will house the China First Coal Project in Queensland and the China First Iron project in Western Australia, and has garnered support from the Metallurgical Corporation of China and Export-Import Bank of China.
Arrow Energy
Coal seam gas attracted plenty of international interest last year and now New Hope Coal says it is open to selling its 17 per cent stake in independent CSG company Arrow Energy. Washington H. Soul Pattinson chairman Robert Millner has told The Age that Arrow’s “natural home is with the big boys”. New Hope Coal, which is 61 per cent owned by Washington H Soul Pattison, bought a 19.9 per cent Arrow stake in 2006 at 58 cents per share with a view to undertaking a full takeover. Arrow shares closed yesterday at $3.99, valuing New Hope’s 17 per cent holding at more than $450 million. The news will likely be of interest to existing players ConocoPhillips of the US, Britain’s BG Group or Malaysia’s Petronas, as well as Royal Dutch Shell, which has a 30 per cent interest in Arrow’s Australian tenements. Early this morning, Arrow told the market New Hope was not in discussions with any further third party regarding its stake.
Lachlan Murdoch, DMG Radio Australia
Patience is a virtue for Lachlan Murdoch, who has taken a 50 per cent stake in DMG Radio Australia, the owner of Nova and Vega radio stations, after an "exhaustive" search for the right acquisition. Murdoch's private company, Illyria, has formed a joint venture with DMG's current owner, the UK's Daily Mail and General Trust. The News Corp director will chair the new company. A price for the deal has not been disclosed. Illyria's other investments include Prime Media and toy wholesaler Funtastic. Earlier this week, Murdoch was rumoured to have held informal talks with marketing communication services company Photon Group.
Woodside Petroleum
Woodside is not for sale, says Don Voelte, responding to speculation BHP Billiton might team up with Royal Dutch Shell to take over and split up the oil and gas producer. “We talk to them [BHP and Shell] about business,” the chief is quoted as saying. “We don’t talk to them about takeovers or anything like that.” According to Bloomberg, he also likened Woodside to a sweet store, saying: “If you go into a candy store, what jumps out first is the thing with the most chocolate and the thing that's prettiest. Companies covet our assets, our capabilities and our expertise. But we don’t pay attention to it.” Voelte also flagged further moves into international debt markets and said the company’s funding plan was intact. “We’ve tapped out Australia as far as you can tap it out,” he said. “We’ve had great support from the four pillar banks. Each one has done as much as they can for us. We can tap the US and Asia. A lot of people want to give us money. What we’re seeing is that the debt markets are still quite open to us.” Woodside sold $US700 million of bonds earlier this month in the US.
Riversdale Mining, Cia Siderúrgica Nacional
Macarthur Coal founder Ken Talbot has sold his 16.3 per cent stake in Mozambique-focused coal group Riversdale Mining to Brazil’s Companhia Siderúrgica Nacional for $190 million, or $6.10 per share. The purchase of 31.2 million shares from Talbot’s private company pushed Riversdale shares to a four-month high. A CSN spokesperson told Bloomberg that coal was the only raw material Brazil’s third-biggest steelmaker didn’t have and the acquisition was the first step towards coking coal self-sufficiency. CSN initially wants metallurgical coal from Riversdale and possibly thermal coal for its power plants, Flavia Ferreira added. Talbot’s resources director, Denis Wood, told the Sydney Morning Herald that in the future Talbot was likely to favour projects he could operate rather than simply invest in. The sale was in part prompted by the company’s lack of management and operational control over Riversdale, he added. A Talbot Group Holdings spokesman, meanwhile, told The Austrlaina Financial Review that Talbot was looking at opportunities in Brazil, Africa and Asia. Indian steelmaker Tata Steel holds nearly 20 per cent in Riversdale, with production from the pair’s Benga mine set to start in 2011.
Amcor
Packaging giant Amcor has flagged the sale of a packaging plant to get its $2.4 billion purchase of the bulk of Rio Tinto’s Alcan business approved by European regulators. Overnight, a two-week delay in the European Commission’s review of the deal was announced, with a new deadline set at December 14. The acquisition, announced in August, will give Amcor the Alcan Packaging food unit in Europe, global pharmaceuticals, the Asia food unit and the global tobacco unit. Amcor has said it expects the deal to be completed early next year.
Queensland Investment Corp
Queensland Investment Corp is on the prowl for Australian, British and US property. QIC global real estate head, Robert Carter, has told The Australian that QIC is “very keen to buy the right property, but at a reasonable price”. Carter says the Brisbane-based public sector funds group is looking to capitalise on the current market dislocation to position itself for the next decade. Carter said QIC, which gained the wrong kind of attention for its investment in the disastrous BrisConnections float, looked at Sydney’s Aurora Place office tower and could be interested in the $450 million Lakeside Joondalup centre in Perth. Big shopping centre investments in the US and Britain could be one the cards, he added, as well as a vulture fund investment.
Wrapping up
The Australian Private Equity and Venture Capital Association has warned of reputational damage to Australia as the Australian Taxation Office hits US private equity firm TPG with a $628 million bill for tax and penalties followings its Myer float. Meanwhile, Japanese power producer Chubu Electric Power has joined Tokyo Gas in buying a stake and liquefied natural gas from the Chevron-led Gorgon project. And the future of carmaker Saab is unclear after General Motors failed to find a new bidder for the bankrupt unit following the decision of Koenigsegg Group to walk away from an acquisition. Coming up on Deals TV, we’ll be looking at the BHP Ravensthorpe sale, the vote on Mirvac Real Estate Investment Trust and LinkedIn.
Get all the latest deals with your breakfast each morning by adding Wheels and Deals to your
email alerts.
Alternatively, you can follow the latest happenings on Twitter.
Twitter.com/WheelsDeals
Related People
Related Companies