DataRoom AM: Leviathan lag

March 30:

It’s now official that Woodside Petroleum’s purchase of a 25 per cent stake in the mammoth Leviathan offshore gas field has been postponed and investors are starting to show concern that the deal will get canned.

Elsewhere, Nexus Energy confirms an approach from Seven Group, Stockland mulls a buyout of Australand Property Group, UGL progresses its planned property divestment and the float of Genesis Energy draws plenty of interest through a successful book build.

Woodside Petroleum has confirmed a delay to plans to enter the Leviathan gas field. As we reported on Friday, a tax ruling from the Israeli government put the $2.85 billion deal on ice just hours before a signing ceremony was due to take place in Jerusalem. It remains to be seen whether a final agreement will be struck on the oft-delayed deal, but investors are getting edgy as shown by 2 per cent falls in the share prices of the two smallest players in the project (by market cap) -- Ratio Oil and Exploration and Delek Group.

Nexus Energy has admitted to talks with Seven Group over a potential takeover. The energy firm, which is flirting with bankruptcy, may have little option but to accept a low-ball bid from Seven, though there have been a few false dawns for pained shareholders. And this dawn is rather cloudy given it would see shareholders receive just a third of the last traded price.

The company was also forced to bat away conflict of interest complaints given Seven boss Don Voelte was also chairman of Nexus up until February. Even if there were no talks before his decision to quit, it’s not a great look.

Stockland is rumoured to be searching for a partner on plans to acquire Australand Property Group. The ASX-listed firm has reportedly charged Citi, Bank of America Merrill Lynch and UBS with the challenge of finding an interested buyer of Australand’s office assets, just weeks after claiming a 19 per cent stake in the firm.

Fund managers consider it likely that a full takeover bid from Stockland will be forthcoming in April, though the firm is believed to only be interested in Australand’s masterplanned communities and industrial business. GPT, Investa and Charter Hall are among likely candidates for the office assets.

Also in property, the sale of the property arm of UGL is reaching a crucial juncture with the ASX-listed group to narrow the list of suitors to about half a dozen this week, according to The Australian Financial Review. The $1bn-plus property division, DTZ, has reportedly largely drawn attention from private equity and TPG is considered a frontrunner should UGL opt against a demerger. Bain Capital, Warburg Pincus, Apollo Global Management and The Carlyle Group are among other names linked to the deal.

In IPO news, the New Zealand government’s float of Genesis Energy has raised close to $700 million, with pricing towards the upper end of the indicative range. The electricity and gas retailer will officially list on the New Zealand and Australian exchanges on April 17.

Finally, Singapore Airlines has lifted its stake in Virgin Australia to 22.17 per cent, from 19.83, leaving the three major shareholders with over 70 per cent of Virgin stock. Rumours persist about a possible takeover but it appears unlikely this year.

Source: http://www.businessspectator.com.au/article/2014/3/31/breakfast-deals/dataroom-am-leviathan-lag?