insto - Australian financial markets

Macquarie’s US real estate investment trust asset Spirit Finance Corp is reportedly up for sale with a price tag of around US$3.5 billion. Reuters reports that Spirit has approached several potential buyers, with Barclays and Macquarie advising on the sale. Spirit’s other owners, which bought the REIT for US$3.5 billion in 2007, include Icelandic lender Kaupthing Bank.

The IPO market is back in the doldrums after the decision by German construction giant Bilfinger Berger to postpone the float of its Australian subsidiary Valemus, citing market conditions. In a frank admission, the company said its "asking price for the Australian business cannot realistically be achieved in light of the current adverse conditions on the stock exchange." The Valemus IPO had been expected to raise up to $1.39 billion and give the faltering local IPO market a much-needed shot in the arm.

On the ASX, financial adviser Deloitte released data showing that there were 67 IPOs in the year to June 30, up from only 28 in financial 2009. The average price move for the 2010 floated companies was negative 10 percent. Deloitte said the best performed IPO was Mongolian coal explorer Hunnu Coal, with the shares rising 408 percent. Myer was among the worst, falling 23 percent. Eight of the ten best performers were in the resources sector. Overall, the S&P/ASX 200 added 8.8 percent for the financial year.

MergerMarket's Q1 2010 M&A

The advent of the new decade saw a flurry of M&A activity throughout the Asia- Pacific. Australia was more subdued, but the pundits are predicting that the action will pick up later in 2010. Catherine Raisig reports.

After roaring back in 2009, the Australian equity market has stalled in the first part of 2010.

Few IPOS, little M&A, virtually nothing in the way of capital raisings, and an index going sideways. that is the story of the Australian equity markets so far this year.

Pundits who predicted the markets would continue to march on with the momentum of 2009. With the ASX 200 index hovering under 4800 points as Insto goes to print, the market will have to improve significantly if some of the year-end predictions by analysts are to be fulfilled.

Fitch ratings’ Robert Zivic looks at the outlook for Australian Infrastructure and Project Finance.

Australian coalminers have declared their hand, making a joint $4.85 billion cash offer for Queensland’s rail-track network. The group of 13 firms, headed by industry giants Rio Tinto, BHP Billiton and Xstrata, are attempting to head off Queensland Government plans for an IPO of the assets, valued at around $7 billion for the above and below rail components. The Government has indicated it wants to sell the integrated assets in the IPO. The miners' group calls itself the Queensland Coal Industry Rail Group and is chaired by former NSW Premier Nick Greiner.

Final bids are due this month for the collapsed Adelaide to Darwin railway. The sales process, being run by UBS, is the third time in two years the asset has been offered for sale. US rail firm Genesee & Wyoming is favoured to win the bidding, although a mystery buyer grabbed some of the railway’s $323 million in senior debt held by a Japanese bank. JPMorgan is reported to have worked with the buyer. ANZ heads the steering committee for the bank’s debt syndicated. The rail link cost more than $1.2 billion to build.

PE Alert – 21 May 2010

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