25 October 2006
Suddenly the best assets are sitting somewhere that the lenders can't get at.
PBL's top numbers man, Geoff Kleemann, was pounding the pavement yesterday, visiting some of the group's main debt investors in a bid to mend relations.Basically, some PBL bond holders were peeved that the group had sold half of its biggest earning assets, changing its risk profile significantly. PBL has roughly $2.5 billion of debt sitting on its balance sheet. One analyst said yesterday that the group had about $700 million to $800 million in cash before the $4.5 billion windfall from PBL Media. So it's not about to go under. In fact, even if it had to repay every cent it owed, the group could cover its debt twice over and still have some left in the kitty.But it's worth keeping an eye on whether PBL has to restructure the debt and what sort of premium it might have to pay to buy out existing bond holders. Market watchers said yesterday some bond holders would be reluctant to take the money and run because they might not be approached next time PBL wanted to raise some funds. ABN Amro and Westpac arranged the meetings for PBL yesterday.Bond holders are not the only ones sobering up to the reality of PBL's proposed deal. PBL shares have now dropped more than 10 per cent from last week's intra-day high and closed at $19.37 yesterday.Amcor flattenedGraeme Hart's dealings in the US have certainly taken the wind out of Amcor's sails.Since reaching a six-month high on October 12, Amcor's share price has fallen almost 7 per cent as speculation of a bid for the company from the Kiwi billionaire has dissipated.The stock closed down 9c at $7 yesterday.Hart, who controls New Zealand forestry group Carter Holt Harvey, has at least one of his hands tied as he completes the purchase of a paper mill in Arkansas from International Paper.Which leaves Amcor boss Ken MacKenzie to fine tune his spiel before fronting shareholders at the AGM in Melbourne today.Macquarie Equities analysts expect the packaging company to reiterate the negative effect of higher energy costs and tough conditions in Australasia due to a "combination of market share loss and cyclical-structural factors".StubbornThe same Kiwi billionaire, meanwhile, seems to be working hard trying to win over Burns Philp shareholders reluctant to part with their shares.Yesterday Graeme Hart's private investment vehicle, Rank Group, extended for the third time its $1.4 billion takeover offer for the remaining 19 per cent of Burns Philp it doesn't own.Hart's attempt to mop up the remaining shares in the food company he has turned into a cashbox has parallels to his full takeover of Carter Holt Harvey earlier this year. He had to extend his offer at least six times and increase it before finally winning shareholders over.Rank said the latest extension to the Burns Philp offer of $1.10 a share would not be extended beyond November 9 - less than a week before the company's annual meeting in Sydney on November 16.CuDeco to go drilling Australia's most colourful mining company, CuDeco, says the diamond drill - vital for providing some credibility to the estimated value of the miner's deposits - is expected to be in place this week.CuDeco said it would soon commence deep core drilling on its Las Minerale Project and a second drill is expected to be in operation by next month.CuDeco says the diamond core holes will be drilled for the resource estimates being compiled by external consultants. These estimates were initially due in mid- to late-September. Earlier this year the miner more than halved its resource estimate for Las Minerale to 25 million tonnes grading 2 per cent copper equivalent from 59 million tonnes grading 2.04 per cent.The downgrade came after the ASX asked for a clarification of its resource estimates. Cudeco shares gained 6c yesterday to close at $3.88.Kiwi grog shopsWoolies' Kiwi chief Michael Luscombe confirmed to local reporters yesterday that the company was in the "very early stages" of negotiations to acquire a chain of liquor outlets in New Zealand.Reports name the most likely target as The Mill Liquorsave, which has 40 shops.Woolworths also plans to reproduce some of its well known Aussie brands in New Zealand by opening category-killer stores along the lines of its successful Dan Murphy brand, and a one-stop shop option.Betcorp last standBetcorp couldn't help but stir up one final controversy before going to the corporate scrapyard.The online gambling operator, which confirmed on Monday that it was selling its entire operations for a commendable $US9 million ($11.9 million), got a "please explain" notice from the ASX concerning the fact that the news was clearly in the market late last week when the share price rocketed.Betcorp says the deal with Bodog was not signed until Friday evening in Antigua and the news was released over the weekend while the markets were closed.Betcorp delists from the ASX at the end of the month and, if approved by shareholders, will delist from London's AIM next month with all remaining funds to be dispersed to shareholders.Betcorp closed down 3c at 37c.