Out of the blue there’s a wave of takeover activity starting to sweep the top end of the ASX – in fact these stories have all emerged in the past 10 days. If all the reports become fact, bids more than $6 billion could be launched, which would need financing.
Some would drain cash from the market, some would need some bank finance, others would be made with paper – and none of these situations, bar the Downer (DOW) bid for Spotless (SPO), might develop any further.
Already Downer, the bidder for Spotless, has run into serious trouble with a flop of an issue to big shareholders and is now waiting for the thumbs down from small retail holders.
Spotless has copped a $1.3 billion offer from Downer at $1.15 a share. Yesterday Spotless shares rose 2.3% to $1.10. Downer shares rose 1.3% to $5.88, still shy of the doscunted issue price to shareholders of $5.92.
There’s speculation in property/accommodation with talk of someone stalking Mantra (MTR), the local hotel and resort chain in a $1 billion plus deal if it happens. Mantra shares rose 3% to $3.02 as the speculation refused to die after Mantra said on Tuesday it wasn’t talking to anyone.
In tourism there’s talk Ardent Leisure (AAD), the wobbly owner of Dreamworld on the Gold Coast, is being stalked by Ariadne Australia in what could be another $1 billion plus deal if it happens. Ardent shares eased slightly to $1.805 yesterday, Ariadne shares were steady on 73 cents.
In retailing Myer (MYR) shares fell 0.4% to $1.19 after with 10% changed hands on Monday. Solomon Lew is not expected to launch a bid but if he did it would be well over $1 billion.
Now Fairfax Media (FXJ) is under scrutiny with a US buyout group looking to put together a bidding group in a $US2.5 billion plus deal, if it happens.
Fairfax Media is reported to be under siege from US buyout group, TPG which listed Myer back in 2009 at $4.10 a share in one of the great flops of recent times.
TPG took its cash from the bid and sprinted out of Australia within hours of the cash coming into its accounts and left behind a reported $739 million tax bill which was overturned by the Federal Court in 2011.
In 2014 TPG tried without success to buy its way into control of Treasury Wine Estates. The board and management of Treasury rejected the approaches, angering some hedge fund and other short term investors.
Treasury shares have since more than doubled the sub $5.20 TPG suggested price to close at $12.14 yesterday.
Fairfax Media shares jumped to their highest level in six years on Wednesday following the report that private equity group TPG is looking at the group.
Fairfax shares rose 7.5% to $1.14 – the highest level since May 2011. They later sold off to close at $1.095, up 2.8% on volume of 20.8 million. That took the three day volume this week to more than 56 million Fairfax shares.
Last month Fairfax revealed it was working on plans to spin off Domain into a separately listed company, of which it would retain majority control.
The move provided boosted the company’s share price (as it was supposed to do) and the shares have been rising ever since, with TPG’s buying helping boost turnover pressure.
Analysts suggest Domain is worth about $2 billion – the majority of Fairfax’s current $2.52 billion stock market value.
TPG has been reportedly seeking out partners for the Fairfax play.
Seven West Media is thought to be a small shareholder in Fairfax, having tried to chase the company back in 2006.
