☕️ M&A intel

Whitehaven has given its strongest indication yet on BHP coal mines

Good morning.

The man who inspired Jeremy Piven’s character Ari Gold in the hit series Entourage is reportedly cooking up a sports deal for the ages - to invest alongside other heavyweights in the PGA Tour and scupper its existing arrangement with Saudi Arabia.

Closer to home, we have some fresh intel on a less sexy but more significant transaction, relating to Whitehaven’s interest in two BHP coal mines currently being auctioned by Macquarie.

*Stock data as of the market close. Commodities and crypto data in USD.

LOI Subscriber #TBD

MARKET MOVERS

Market News: Whitehaven Coal was the strongest performer among the top 200 yesterday rising 6%. Our stablemates at Capital Brief broke the news overnight that the company had given its strongest indication yet that it won’t raise fresh equity to finance its bid for two BHP coal mines. The company has also begun its own polling of shareholders about the deal and its management as it looks to fend off UK activist hedge fund Bell Rock’s opposition to the transaction.

Market chatter suggests the BHP assets could fetch around US$3.5 billion ($5.5 billion), which is a big bite for a company of Whitehaven’s size to swallow. But WHC does have excess cash on its books and there are still lenders, including offshore banks and private credit funds, willing to finance coal, especially at current elevated prices.

Together with Stake | Invest on Wall St and the ASX

THE QUICK SYNC

  • Liverpool FC’s owners Fenway Sports have sold a minority stake in the club to another private equity firm, Dynasty Equity, for US$100-$200m (Guardian)

    • Fenway Sports and the owner of WWE and UFC are exploring investing in the PGA Tour in a possible alternative to Saudi Arabia’s offer (Bloomberg)

  • Bridgewater’s Ray Dalio has warned the US is facing a debt crisis (CNBC)

  • PwC’s apology tour extends to its alumni - including our reporter (Capital Brief)

  • Fortnite maker Epic Games is laying off 16% of its workforce or 870 people (TechCrunch)

TRADING FLOOR

M&A:

  • Whitehaven Coal hints it won't seek new equity for BHP coal mines. (Capital Brief)

  • Regal Partners abandons its proposal to acquire asset manager Pacific Current Group, citing a lack of engagement from Pacific's board. (Capital Brief | The Australian)

  • HSBC is set to acquire Citigroup's consumer wealth management business in China. (Capital Brief)

  • Rumors suggest Generation Development Group may be a takeover target as consolidation in the funds management sector gains momentum. (The Australian)

  • Temasek in Singapore is moving quickly to sell its 40% stake in Jemena. (AFR)

  • Bidvest has made nearly $500m in acquisitions in Australia over the past 18 months, with its most recent purchase being Consolidated Property Services. (The Australian)

  • With rising short interest, investors are pondering if Genesis Minerals is preparing for more M&A or coping with the recent index inclusion aftermath. (AFR)

  • Chalice's Gonneville project drew interest from multiple mining and trading firms during its mid-September indicative bidding process. (AFR)

Capital Markets:

  • Datt Capital is expanding fundraising for its newly launched Small Companies fund, having secured an initial $25m from existing and new investors. (AFR)

  • De Grey Mining launches a $300m equity raise alongside the release of the definitive feasibility study for its flagship Hemi resource. (AFR)

  • How a Virgin IPO could make life even tougher for Qantas. (Capital Brief)

  • Recycling infrastructure outfit CDSA is raising $16.8m (AFR)

VC:

  • Infravision secures $36m in a Series A funding round to address growing demands in key markets, including Australia and North America. (BNA | AFR)

Others:

  • The Mathieson family has engaged Luminis Partners and Arnold Bloch Leibler for Endeavour's upcoming October annual meeting. (AFR)

  • How $34bn kiwi infra giant Morrison & Co is investing for the energy transition and why it is lukewarm on nuclear power (Capital Brief)

  • Washington H. Soul Pattinson increased its final dividend following a strong portfolio performance. (Capital Brief)

  • Brickworks reported a 54% decline in annual profit due to inflationary pressures and supply problems impacting its results. (Capital Brief)

INSIGHT OF THE WEEK BY STAKE

Juicing up returns

If orange juice is your favourite go-to drink, you’ve probably been having a bad time of it recently. Frozen orange juice prices are up more than +75% YTD and over +235% in the last three years. The main reasons are the spread of citrus greening, a bacterial disease that renders fruit inedible, as well as extreme weather events in Brazil and the US, the two biggest orange producers. However, the future might not be so sour, as futures curves are currently in backwardation: prices for orange juice in 2024 and 2025 right now are lower than for 2023, indicating that markets expect a price drop in the coming years.

This is not financial advice.

THE WATERCOOLER