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Tonight, we present lessons from the latest edition of M&A Monday: |
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There is a truckload of M&A bids out there.There is a truckload of private capital looking for a home.There is a truckload of broken M&A dreams coming. |
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That’s what we make of a hectic Monday – a day when Sydney Airport revealed a surprising $30 billion bid, which, if completed, would be Australia’s biggest ever M&A deal. |
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At first glance, it was hard not to like. IFM Investors has plenty of capital – both in terms of funds to spend and political capital to buy sometimes tricky assets – and it was partnered up with its usual rival, Global Infrastructure Partners, which doesn’t miss when it comes to Australian M&A. |
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There was also a 42 per cent premium, an advisory team spearheaded by one of the country’s top bankers (Christian Johnston, Goldman Sachs) and lawyers (Tony Damian, Herbert Smith Freehills), and an open invitation to the normally pragmatic UniSuper, which owns 15 per cent of Sydney Airport and whose shares are almost looking like a pre-bid stake. |
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But – as we were reminded at Tabcorp – more of these deals fall over than get completed. Tabcorp, having given some management presentations to potential acquirers Entain and Apollo Global Management, decided it would be better off alone, spurned suitors for its wagering unit and is charging down the demerger path. |
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So while it’s easy to get caught up in the M&A hype, it’s worth remembering there’s plenty to play out at Sydney Airport before we’re looking at a $30 billion completed deal. |
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When you look at the top 15 deals in Australia ever — and we have the list tomorrow — three of them are to do with Westfield (which had a strong founder/shareholder pushing the agenda). There are two demergers (Coles and Endeavour Group) and three privatisations (Ausgrid, TransGrid and WestConnex), leaving not a lot of room for run-of-the-mill M&A transactions such as Sydney Airport in the $10 billion-plus club. |
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But, as we said, IFM is no time waster and has been thinking about this move for a long time. |
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Sarah Thompson, Anthony Macdonald and Yolanda Redrup Street Talk Editors |
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It would be a coup for the private equity firm, which has a good working knowledge of Australia’s $4 billion a year diagnostic imaging services market. |
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It will argue that its twin Australian and global infrastructure funds can be run separately and act independently, as part of a $30 billion bid to buy the airport. |
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Premier Investments is understood to be keen to increase its stake, to once again seek to bring about change at the struggling retailer. |
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Australian buyout firm Pacific Equity Partners has finally found a buyer for its oldest investment. |
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The capital raised will help the Sydney-based business to expand its production and distribution. |
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