SYDNEY (Reuters) - Canada’s Brookfield Asset Management (BAMa.TO) has put the $2 billion sale or potential listing of its coal export terminal in Australia on hold due to travel restrictions amid the spread of coronavirus, two sources said.
Running a sale and listing process had become impossible given travel bans due to the global outbreak, the sources said, declining to be identified because they were not allowed to talk to the media.
The decision makes the Dalrymple Bay Coal Terminal (DBCT) the largest and most high profile corporate transaction in Australia to fall victim to the volatile financial market conditions sparked by the epidemic.
The dual track process, which also includes the prospect of an initial public offering (IPO), could be restarted in the middle of the year with the aim of a transaction in the third quarter, according to one source with direct knowledge of the matter.
A non-deal roadshow to meet fund managers as part of the IPO process was due to start in the United States next week before shifting to Europe, but that was put on ice because of the travel bans that banks, law firms and advisory firms have put in place for staff.
The Hong Kong leg of the roadshow was due to take place via a video conference, according to one source.
Takeover activity in Australia had started strongly in 2020 after Alimentation Couche-Tard Inc increased its bid a third time to buy Caltex, the Australian fuel retailer, to value the company at $8.8 billion.
The firm had originally offered A$32 a share for the company, then A$34.50 and a February bid of $A35.25 was deemed enough by the Caltex board to allow due diligence to be carried out.
However, Caltex’s shares have now weakened substantially on the back of a volatile global price and closed at A$27.53 on Wednesday.
Cinema and theme park operator Village Roadshow is also at the centre of a takeover tussle between private equity groups BGH, which has offered A$4 a share, and Pacific Equity Partners whose bid is A$3.90.
First round bids submitted for DBCT in late February had valued it at over A$2 billion ($1.3 billion), two sources said, but the extensive due diligence and site visits required to continue the sale process would be too difficult to perform in the current environment.
A spokesman for DBCT declined to comment. A spokeswoman for Brookfield did not immediately return an email seeking comment.
($1 = 1.5368 Australian dollars)
Reporting by Paulina Duran and Scott Murdoch; Editing by Richard Pullin and Kim Coghill