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Gun for hire...Andrew Peacock tried a Kansas play.

CBD

Amadeus a sour note for Peacock  

A former Liberal leader, Andrew Peacock, is a shrewd operator of the political process.

A man who knows when the numbers are stacked against him. A man who knows when to fold.

So it has come as no surprise Peacock has decided to "retire" as the chairman of Amadeus Energy after a face-off with the group holding 2.65 per cent of the company, CVC Limited (not to be confused with the private equity group that has dud investments such as Stella Group and PBL Media).

After some rants from CVC's managing director, Sandy Beard, over Amadeus's plans to raise $25 million in a private placement that would dilute existing shareholders by 50 per cent, Peacock finally buckled yesterday.

In a statement to the market, Amadeus said a vacancy had suddenly appeared on its board for Beard following Peacock's decision to step down, along with another director, Caroline Bentley.

Apparently, ahem, Peacock "had previously indicated his wish to retire at this time".

The company additionally announced plans to replace its managing director, Geoff Towner.

Amadeus also relented by announcing why it actually wanted to raise the $25 million (to buy a company based in Wichita, Kansas, called TNT Engineering) and that it would also allow its current shareholders to participate in the raising via a share purchase plan.
 
CVC all of a sudden appears OK about the raising now it has a seat on the Amadeus board. The group has withdrawn its request for an extraordinary general meeting to block the raising.

Adviser at large

And it is not the first time Peacock has resigned the chairmanship of a company following intense pressure from a minor shareholder.

Peacock pulled the pin on his chairmanship at the now collapsed MFS Limited (rebadged Octaviar) after some agitation from a banana-bending businessman, Chris Scott, who at the time had allegedly received a margin call over his 3.5 per cent stake. Scott managed to get himself planted on the MFS board with two of his business chums.

The 70-year-old Peacock is now without a seat on a public company. His previous boards include Boeing Australia; the company that never made an orbital engine, Orbital Group; and Child Care Centres Australia.

At least Peacock has enough to see him through the next few months. His 2 million options in Amadeus are now in the money. But it is unclear if the former politician will continue his consultancy agreement with Amadeus.

On top of his modest $87,500 in chairman fees, Peacock earned an extra $25,000 offering his "corporate advisory services" last financial year. It is unclear if his corporate advisory skills helped with the group's planned $25 million raising.

Cudeco rocker

The chairman of the Gold Coast-based copper explorer Cudeco Limited, Wayne McCrae, has paid a fitting tribute to his musical hero Peter Gabriel.

Yesterday Cudeco announced to the market that it had discovered a "potentially significant mineralised system" near Cloncurry in Queensland, which it named after the stirring Gabriel song Solsbury Hill. "It's a good song, I love it," McCrae confided to CBD. It is unclear if McCrae is attempting to get a message across to his doubters.

The song was penned after Gabriel left the superband Genesis, seeking some inner spiritual strength. Some of the lines in the song include: "I did not believe the information / Just had to trust imagination", "My friends would think I was a nut / Turning water into wine", and "So I went from day to day / Tho my life was in a rut." McCrae played Solsbury Hill at his now infamous briefing to the Sydney Mining Club in February 2007, where he referred to his critics as "dickheads".

At the same presentation, McCrae showed he also had a soft spot for an alternative country songwriter, Steve Earle, after playing his tune Copper Road. "The problem is that the Sydney Mining Club are so used to funeral music they didn't know what to do when Copper Road and Solsbury Hill came on," McCrae recollected.

Super situation

Tower Australia was given a handy lift yesterday when AustralianSuper awarded it a $600 million three-year tender to provide death, disablement and income protection insurance to its 1.4 million members. A few eyebrows were raised given the chairwoman of AustralianSuper, Elana Rubin, also happens to have a seat on the Tower Australia board.

But AustralianSuper's chief moustache, Ian Silk, was happy to provide some comments to any cynics out there.

"She [Rubin] received no papers associated with the tender, she received no briefings associated with the tender, she was excluded from all board and committee discussions on that tender and obviously she was excluded from the decision," the former forklift driver told CBD.

"She had no knowledge of what was going on from the outset until today when she was informed after the decision was made public." Phew. "She knew less about it than probably a member of the public," a Tower Australia spokesman chipped in.

Publicity leak

Comedian Elliot Goblet (aka Jack Levi) has launched a blanket ad blitz across urinals at Sydney, Melbourne and Brisbane airports to promote his services as a corporate entertainer.

"I am just reminding people I am around," said Goblet, who added that he was keen to help companies deliver their corporate message in the upcoming silly season.

Asked why he declined to advertise elsewhere, such as bus shelters, Goblet said: "I have come up with an ad that works really well in urinals."

He explained to CBD he was also pleasantly surprised when he sat down in a cubicle at Sydney Airport. "I was in Sydney over the weekend and I noticed there was an ad of mine on the back of a toilet door.

So they have actually given me a couple of extra spots." Goblet said he was confident the new campaign would be more successful than his previous ad of him in a clothes dryer promoting his brand of "dry wit".

"I've already had one positive inquiry for a corporate job at the end of the year.

That guy actually spelled out that he saw me at a urinal and he wanted to know my fee."

Got a tip? email srochfort@smh.com.au

BUSINESS FOCUS

Extending King's reign

Leighton has hinted its long-serving chief executive, Wal King, will remain at the company after his contract expires next year. Leighton said it had "agreed to amend Mr King's contract to provide flexibility to extend his employment terms beyond June 30, 2010".

Solar switched off

Solar Systems, which was to build the world's biggest solar photovoltaic power station in Victoria, has been placed into voluntary administration. It is a blow for the renewables industry and the federal and state governments which contributed $125 million towards the $420 million project to build the 154MW solar farm – enough to power 45,000 homes.

Big plans for Danks

The hardware joint venture between Woolworths and Lowes last night released a bidder's statement for their $88 million offer for Danks. It said they would seek to expand the Danks business by adding new customers and acquiring other hardware chains.

China pips US

China's top 500 companies outperformed their US counterparts for the first time last year. Profits at the nation's best-performing firms totalled $US200.8 billion in 2008, compared with $US116.3 billion for the US firms, according to a survey by the China Enterprise Confederation.

Cash on the table

Denis O'Brien, a shareholder in Independent News & Media, is willing to stump up to €60 million of his own cash to prop up the struggling media group, which is the largest shareholder in APN News & Media.

Bolton blocked

Rebel investor Nick Bolton has been blocked by the Takeovers Panel from his plan to take over Multiplex Prime Property Fund for as little as 0.3c a unit.

Xchange

Edited by Jamie Freed


Day-by-day dilution at B&B Infrastructure 

The condition of Babcock & Brown Infrastructure appears critical now that it has admitted its asset sales program is unlikely to cover its debts in the near term.

While BBI is hoping the potential injection of capital from a cornerstone investor can save the company, it is more likely to prove a boon to its banking syndicates than to its long-suffering shareholders. A Merrill Lynch analyst, Matthew Spence, calculated the full conversion of BBI's BEPPA and SPARCS hybrids – a likely condition of any recapitalisation plan – would leave current shareholders with just 18 per cent of the company.

And that is before the cornerstone investor injects additional equity in return for what is likely to be a majority stake in the company. After that, existing holders would own less than 9 per cent of the company, which would then have more than 29 billion shares on issue.

But those calculations were based on Friday's closing share price of 6.1c, compared with BBI's closing price of 4.5c yesterday. That means the potential dilution is getting worse by the day – a condition that some punters have labelled a "death spiral". Spence said it was possible a fire sale of assets and the wind-up of the company would provide a better return, but it remained unclear if a fire sale would be enough to repay the banks, let alone other holders.

The finalisation of the recapitalisation plan is subject to bank approval, and there are said to be about 30 involved, so it could take some time. The banks may prefer a capital injection from the cornerstone investor to a liquidation because the funding provided by that investor would flow straight to the banks.

As for equity holders, the fact the stock exchange refused to grant BBI a suspension from trading while it negotiates with the cornerstone investor may prove a blessing in disguise.
 
It will allow them to exit before they are diluted further or the company potentially collapses into administration.

Preparations at Myer

Myer's board may be waiting until Thursday to officially sign up for a mooted $3 billion float – before its results presentation on Friday – but the unofficial signs that it will proceed with the offering are about as clear as can be.

Filings with the corporate regulator last week included a "notification of a share issue". And the week before, Myer changed its status from a proprietary company to a public company limited by shares in documents signed by TPG and the other shareholders.

It also filed a "notice of declaration of fund-raising" last Friday, although the full details have yet to be processed by the regulator. Myer's recently revised corporate constitution has provisions for the issue of dividends and preference shares in line with those of many other public companies.

So unless Myer is planning to suddenly reverse course and rack up another set of fees with its lawyers at Freehills, a float fairly soon looks all but certain.

Another gig at Sigma

Deutsche Bank beat off a few rival investment banks to win the gig as the sole underwriter of Sigma Pharmaceuticals' surprise $297 million renounceable entitlement offer.

The fact Deutsche trades more Sigma stock than any other broker and also serves as Sigma's defence adviser would not have hurt its chances. Of the money raised, $60 million will be put towards a small acquisition and the rest will help lower Sigma's gearing to 29 per cent.

Its balance sheet has been considered stretched and the funds will place it more in line with its peers. Sigma will cough up $10 million in advisory fees as part of the raising, which is more heavily weighted towards the retail component because of the large number of pharmacists who remained on its share register after the one-time co-operative went public.

Sigma is seeking $132 million from institutions at a fixed price of $1.02, a 16 per cent discount to its last traded price, and will then seek $165 million from retail investors. Any retail shortfall will be sold to institutions in a bookbuild. If the tender price is above $1.02, it will allow shareholders who did not take up the rights to receive the difference.

Xstrata endgame

At the top end of the mining industry, Xstrata appears to be at a strategic crossroads. The Anglo-Swiss miner is reportedly examining a bid to sweep up the rest of the platinum producer Lonmin after a 12-month ban by the UK Takeover Panel expires next month.

But a bid for Lonmin would almost certainly rule out a potential merger with Anglo American. An Xstrata-Lonmin-Anglo combination would trigger serious concerns among regulators about the level of concentration in the platinum market, unless major divestments were made.

And a cash bid for Lonmin would weaken Xstrata's balance sheet and its ability to add a cash sweetener to a potential formal offer for Anglo. Many industry insiders believe the real endgame for Xstrata's boss, Mick Davis, is to sell his company after dressing it up in a suitable fashion.

If so, buying the rest of Lonmin would likely boost its attractiveness to potential suitors, with the notable exception of Anglo.

A German cleansing

Some eyebrows were raised yesterday when Leighton Holdings' major shareholder, Germany's Hochtief, filed a change of substantial holder notice that indicated a slight increase in its 54 per cent stake. Xchange was assured Hochtief was not creeping up the register. Instead, the new notice accounted for shares Hochtief took up in a rights issue last year, and was meant as a cleansing statement before the release of Leighton's annual report.


xchange@smh.com.au