The $1.5 billion float prospect United Petroleum has become the latest company to put the brakes on its initial public offering plans after billboard operator QMS Media yesterday suspended part of the roadshow for its mooted June listing.
The arrival of IPO prospect Viva Energy has caused South African-born entrepreneurs Avi Silver and Eddie Hirsch, who founded the United business 30 years ago, to pause and reconsider the options, according to sources.
Plans by Vitol have recently been on the radar for an IPO of its 870 Coles-branded petrol station sites it purchased from Shell last year as the market remains open for new listings.
The company is said to be considering a float of the properties, effectively creating a new real estate investment trust on the market through investment banks Bank of America Merrill Lynch and Deutsche worth more than $1bn.
Dataroom reported in February that the possibility of a sale and lease-back of United’s real estate could be explored.
However, some say that the move by Viva has made United once again focus its attention on such a possibility.
One scenario could be that the company observes how well-received Viva Energy is by the market before determining whether to follow through with such a plan.
A factor that may need to be considered will be matters related to ground contamination, which could require extensive remediation if the sites are old.
United Petroleum controls more than 8 per cent of the retail fuel distribution market and directly owns 330 petrol stations throughout the country, along with a further 80 wholesale stations.
A non-deal roadshow throughout Asia and Australia has already occurred for a possible IPO, and expectations have so far been that the company’s market capitalisation will be well over $1.5bn, should it list on the public market, according to sources.
S-Oil Corp, which looked over the business some time ago is said to have recently cast another eye over United, which may indicate a trade sale is yet to be ruled out.
Meanwhile, billboard operator QMS Media has shelved the domestic roadshow for its June initial public offering, according to sources.
The Qatar-based company was to launch its management roadshow in Sydney and Melbourne for the IPO, but sources were told on Monday morning that the meetings had been postponed due to paperwork that had not yet been completed. QMS, which operates in Australia, New Zealand and Indonesia, has plans to list in June with a $165 million market value, raising $85m at 80c a share through lead manager Baillieu Holst.
Bradken back in play
Perpetual takeover target Bradken could be back in play, with talk in the market that some investors in the company are extending support for a bid of about $3 per share by a suitor.
Just weeks after Pacific Equity Partners and Koch Industries walked away from Bradken when its board rejected their $2.50 a share offer as opportunistic, it’s thought that other parties may now be circling the business.
Feedback suggests a 50c sweetener on the PEP-Koch offer would be enough to get a purchase across the line.
The support for such a price could be based on fears that another profit downgrade could be looming for the mining services provider at a time more pain in the sector is widely expected.
Such groups are suffering from cost reductions being made by resources companies, which are being hit hard by falling commodity prices and some are now on the brink of collapse.
Shares in Bradken yesterday closed 6c higher at $2.25.
Any profit downgrade could potentially trigger a breach of Bradken’s debt covenant, of three times net debt to earnings before interest, tax, depreciation and amortisation, forcing the company to embark on a capital raising. They sit at about 2.7 times.
While the Koch consortium has walked away from the deal, the widely held belief is that the parties are likely to return to the negotiating table if they can make the numbers stack up.
An interesting aspect of a potential acquisition by the consortium would be how they planned to break the business up.
It is believed unlikely global industry giant Koch would hold the business with PEP for the long-term.
Meanwhile, speculation of a move by Bradken to buy into Quadrant Private Equity’s CQMS Razer in exchange for scrip in the listed group has been hosed down, with some suggesting such a move would spark objections from the Takeovers Panel.
PEP made an approach last year for Bradken with Bain Capital, initially offering $5.10 per share, but the deal never proceeded.
It is understood shortly before that offer emerged, Bradken’s adviser Bank of America Merrill Lynch was working with a party hoping to take a 15 per cent stake in the company through a placement of convertible notes. At the time, the company’s share price was trading at more than $3 a share. However, PEP was said to have pre-empted the move and outed itself as a suitor of the business, scuppering the capital-raising plan.
Legally, Bradken would have probably been prevented from embarking on such a move when the company was in play without shareholders’ approval.
Telcos’ future on line
M2’s move to rival TPG Telecom in iiNet yesterday through its $1.6bn scrip offer for iiNet effectively puts the information technology sector in play.
The thought is that the Goldman Sachs-advised M2 could be vulnerable to becoming a takeover target itself if it does not succeed in securing iiNet.
It comes amid what is currently an industry race for consolidation triggered by the switch to NBN as the wholesale provider for their broadband services.
Should TPG be unsuccessful in its pursuit of iiNet, one thought is that the company could turn to M2 itself as a takeover target.
M2 itself could also be on the radar of Optus if it is unable to secure the Perth-based internet and mobile phone service provider.
The thinking is that TPG, which is advised by Macquarie Capital, could easily fund a superior rival cash bid of $10.05 per share for the iiNet business, but had the capacity to bid up to $11.50.
$100m Healthcare buy
Generation Healthcare REIT will today announce a $100m-plus acquisition of properties from aged care provider RSL Care, in a deal advised by Macquarie Capital and funded by a capital raising.
Extracted in full from The Australian.