bids are in., page-7

The directors are looking after their jobs by not accepting the take over offer. From the article below, it looks like the offer was around $6.50.

The games are just beginning.

Aug. 29 (Bloomberg) -- Carlyle Group and National Hire Group Ltd. plan to borrow A$2.2 billion ($1.9 billion) to fund their bid for Coates Hire Ltd., Australia's biggest machinery rental company, said three people with direct knowledge of the deal.

Washington-based Carlyle and National Hire, backed by Australian billionaire Kerry Stokes, may offer A$1.5 billion for shares of Coates, said the people, who declined to be named before an announcement today. The group is the frontrunner to buy Coates after Sydney-based Pacific Equity Partners and Nikko Principal Investments Ltd. withdrew from the race, the people said.

The deal will test investor appetite for loans and bonds that fund leveraged buyouts as the U.S. subprime mortgage crisis roiled credit markets. An increase in financing costs, shareholder resistance and higher valuations have scuttled at least A$42 billion of buyout attempts in Australia this year, including bids for Qantas Airways Ltd. and Coles Group Ltd.

``Coates Hire is in a pretty sweet spot as 70 percent of its business is related to infrastructure and mining sectors, which are benefiting from strong economic growth,'' said Craig Stranger, an analyst at Austock Brokers in Melbourne. ``The company's management hasn't been able to capitalize the full potential of the business.''

Bidders would need to offer at least A$6.20 per share for the takeover to succeed, said Stranger, who has a buy recommendation on Coates Hire and Sydney-based National Hire.

Coates shares fell 2.1 percent to A$5.53 yesterday. The company said May 1 it had appointed Macquarie Bank Ltd. as an adviser after being approached by buyout firms.

The Carlyle-led group plans to get the funding from ABN Amro Holding NV, Australia & New Zealand Banking Group Ltd., Calyon, Mizuho Corporate Bank Ltd. and Westpac Banking Corp., the people said.

Refinance Debt

The A$2.2 billion loan will pay for the acquisition of Coates and refinance the existing debt of Coates and National Hire, said the people.

The proposed bids came less than a month after Flight Centre Ltd., Australia's biggest travel agency, scrapped its planned sale to a buyout firm for the second time this year. Private equity firms completed $1.6 billion of leveraged buyouts in the nation this year, down about 53 percent from the same period in 2006, according to data compiled by Bloomberg.

A group led by Macquarie Bank Ltd. admitted defeat on their A$11.1 billion buyout of Qantas Airways in May after failing to get enough shareholder acceptance. In June, private equity partners for Wesfarmers Ltd.'s bid to buy Coles Group Ltd., walked out of the deal as concerns over losses tied to U.S. subprime mortgage securities made it more expensive to pursue a leveraged buyout.

Coates Hire Chairman Bill Cutbush wasn't immediately available to comment. Stephen Yan, a Sydney-based spokesman at Macquarie Bank Ltd., Dorothy Lee, Carlyle's spokeswoman in Hong Kong and National Hire Managing Director Stephen Donnelley declined to comment.

A successful buyer of Coates would own a company with a 20 percent share of Australia's A$3.5 billion hire market, delivering 200 outlets across the nation renting everything from outdoor toilets to trucks and bulldozers. National Hire has a market share of about 6 percent.

Coates, which had 2006 sales of A$715 million, also hires cranes, dump trucks, landscaping equipment and fencing, and has units in Indonesia and the U.K.