New corporate advisory players lift market share

16/07/2018 - 10:21

Bookmark

Save articles for future reference.

SPECIAL REPORT: Western Australian companies were involved in 235 corporate finance deals worth $6.9 billion in the June quarter, with new advisory firms playing an increasing role, research by Business News has found.

New corporate advisory players lift market share
South32’s acquisition of Arizona Mining was the largest deal for the quarter. Photo: Attila Csaszar

Western Australian companies were involved in 235 corporate finance deals worth $6.9 billion in the June quarter, with new advisory firms playing an increasing role, research by Business News has found.

The total value of deals was given a large boost by South32’s $1.75 billion acquisition of Canadian base metals miner Arizona Mining.

That was one of 67 merger and acquisition deals worth $4.9 billion listed in the BNiQ Search Engine for the June quarter.

(CLICK TO SEE A FULL PDF VERSION OF THIS SPECIAL REPORT)

On top of that, WA companies and advisers were involved in 168 capital raisings worth $2 billion.

Local stockbroking firms continued to dominate the league table for capital raisings, with Hartleys having a lead role on 17 transactions worth a total of $478 million.

This included the initial public offering of Jupiter Mines and raisings by Cash Converters International and West African Resources (see next page).

Euroz Securities and Argonaut were also relatively busy during the quarter.

 

Patersons Securities is the largest stockbroking firm in WA, ranked by number of client advisers (see page 23), but continues to be outshone by the likes of Hartleys and Euroz when it comes to corporate finance deals.

The dominance of local brokers partly reflects the lack of big-ticket capital raisings during the quarter.

For instance, national powerhouse Macquarie Capital’s largest deal was a $90 million raising for Emeco Holdings.

Among the law firms, Allen & Overy illustrated the manner in which Perth-based lawyers work in a global market.

Perth-based partners Luke Nicholls and Geoff Simpson took a lead role on a $US306 million ($390 million) raising by international property group ESR Cayman.

This was the largest capital raising for the quarter, ahead of the Jupiter Mines deal, for which Jackson McDonald was legal adviser.

Bellanhouse Lawyers is a relatively new player and continues to make inroads into the small-cap market previously dominated by Steinepreis Paganin.

Bellanhouse worked on nine capital raisings worth $131 million, putting it just ahead of Steinepreis Paganin in terms of money raised.

Both firms also worked on a handful of M&A transactions.

Goldman Sachs topped the M&A league table, courtesy of its role as lead financial adviser to South32 on the Arizona Mining takeover.

While most of its global peers have withdrawn from the Perth market or scaled back their presence in recent years, Goldman has expanded, and now has six Perth staff led by Peter Watson, who also heads the group's national metals & minig practice.

Year-old West Perth firm Sternship Advisers, which worked on six June quarter deals, was next on the list behind Goldman Sachs (see accompanying article).

King & Wood Mallesons worked on three M&A deals during the quarter worth $2.5 billion, but not always in a lead capacity. 

The firm undertook some work on the South32 / Arizona deal, but most of the legal work was undertaken by Canadian firm Osler, Hoskin & Harcourt and US firm Perkins Cole, which were named by South32 in its anouncement.

The takeover battle surrounding Atlas Iron provided a handy boost for multiple advisory firms and lawyers.

This included defence advisers Houlihan Lokey and DLA Piper, which have now dealt with two bids for the struggling iron ore miner.

Macquarie Capital continues to be one of the most active advisers in the WA market, notably by advising local mid-cap companies.

It advised Emeco Holdings and Sandfire Resources on successful takeovers, and has been retained by Mineral Resources to sell a 49 per cent stake in its Wodgina lithium project in the Pilbara.

Macquarie is also advising Sydney-based APA Group on the $13 billion takeover proposal lobbed by Chinese group CK Infrastructure Holdings (CKI).

With neither group based in WA, this transaction is not included in the BNiQ database, even though APA has extensive assets in the state including the Emu Downs solar farm, the Badgingarra wind farm and multiple gas pipelines.

To deal with competition watchdog concerns, CKI has proposed selling off three of APA’s main WA assets – the Goldfields gas pipeline, the Parmelia gas pipeline, and the Mondarra gas storage facility.

This spin-off, on its own, would be a major WA transaction.

Another major WA deal in the offing for more than a year is the sale of oil and gas producer Quadrant Energy.

Quadrant’s owners, including Brookfield Asset Management, were believed to have been close to a stock market float this year, led by Goldman Sachs and UBS.

However, they are now believed to be considering trade sale options, with Santos considered a potential purchaser given its interest in several joint ventures with Quadrant.

View our comprehensive database of corporate transaction activity at businessnews.com.au/Corporate-Finance.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options