![]() Some US analysts believe that DirecTV will leverage up its net debt free balance sheet in 2006, with surplus capital being returned to shareholders by either retiring the shares held by GM pension fund or through an on-market buyback. Any move above 50 per cent by either News Corp or GM before then would trigger the threshold at which the deal would become a taxable event. However, News Corp's options are constrained until the two-year anniversary of its acquisition of its DirecTV stake on December 22. The lock up on GM selling its remaining DirecTV shares expired on August 11. While the fund has a fiduciary duty to extract the maximum value possible, GM's weakened financial health does not leave it in a strong negotiating position. News Corp has a 33.87 per cent interest in DirecTV.īallooning pension costs is one of the key issues knee-capping the car manufacturer and the fact that the investment in DirecTV accounts for just under 37 per cent of the value of the GM pension plan makes the stake a prime target for sale. GM's stake is worth $US3.16 billion ($4.17 billion) based on Monday's closing price of $US14.71 a share. ![]() GM's pension fund is the second-largest shareholder in DirecTV behind News Corp, with a stake of 215.16 million shares or 15.49 per cent of the shares on issue. Last week, global funds management group Fidelity Investments took a somewhat out-of-character stake in West Australian uranium prospector Redport, upping it again this week to 10 per cent. With uranium contracts changing hands at $US30 a pound (four times higher than four years ago) and uranium explorer Paladin Resources outperforming every stock on the ASX, there is likely to be keen interest in the ERA stake. The ERA sell-down is likely to extract a number of proposals for "bought deals" from investment banks, whereby the financial institutions guarantee a set price for all the shares on offer, then profit from any upside in the eventual sales price. The three shareholders looking to exit ERA will first have to convert their unlisted "B" and "C" shares into ordinary shares, giving them rights to appoint directors to ERA's board. Investment banks were yesterday looking over the request for proposals, which called for recommendations on packaging the deals to sell to institutions. The stake being sold by Uranium miners Cameco Corp, Cogema and Japan Australia Uranium Resource Development is worth about $700 million at today's prices. The fact that they've signed up to sell AAPT is a pretty sure sign that Citigroup does not fancy its chances at getting a role on T3. If Telecom NZ's decision to get rid of AAPT results in a sale via an initial public offering or a trade buyer selling its own shares to help fund its move, that floods the market with telco stock when Telstra can least afford it.Ĭitigroup has been mandated to advise Telecom NZ on its strategic options in Australia, which is usually code for sell it if you can get the right price. If it sells to Optus or Vodafone, Telstra faces significantly tougher competition in a market where it is already losing share. New Zealand's biggest telco was probably hoping the Australian government's proposed sell-down of Telstra would deflect attention from its sale, allowing it to avoid the media circus that attracts most major phone deals in this country.īut the deal is unlikely to escape the spotlight as it could have major ramifications for the Telstra sale on a number of levels. Telecom New Zealand is rumoured to be mulling the sale of its circa $1 billion Australian business AAPT and has been quietly sounding out potential trade buyers in the past few weeks.
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