The market was abuzz with chatter on Friday about a major equity raising that was said to be in the works.
It is understood that some investors had been wall crossed on a deal as at Friday, but sources in the market were puzzled as to what Australian listed group could be in the market for a large amount of cash.
Wall crossing is a technique used where investors are brought in on a company’s confidential plans to raise equity ahead of time to determine whether they will gather their support on the terms.
Suggestions are a deal could be announced as early as Monday.
Typically, major investors in a stock only get wall crossed on a major raise – one that would certainly be over $500m or even closer to $1bn at least.
In terms of what could possibly be the target, most expect that a raise would relate to some sort of mergers and acquisitions activity, given the balance sheets of most major listed corporates are in strong shape despite the weaker conditions and higher interest rates.
There had been some chatter that Lendlease or Ramsay Health Care could tap the market, but most are comfortable now that they can reduce their leverage through asset sales.
Separately, there is talk in the market that another major outbound deal like the Orora acquisition of Saverglass is looming.
Some have pointed to Goldman Sachs as the bank involved, although a source at the bank denied it was working on a deal.
In terms of Goldman Sachs’ major clients, they include groups like Treasury Wine Estates and REA Group.
Treasury Wine has signalled an eagerness to embark on acquisitions, and with the luxury market booming, it could perhaps set its sights on a premium wine brand offshore.
But some question whether there would be a company large enough to warrant such a big cash call.
Then there is the booming lithium space, with some wondering whether Mineral Resources is not yet finished with its mergers and acquisitions plans.
As well as Liontown, Patriot Battery Metals, Pilbara Minerals, Azure Minerals and Chalice Mining are all part of the conversation in the market when it comes to mergers and acquisitions among battery minerals producers.
Yet most are genuinely perplexed about the speculated deal, with none glaringly obvious.
A huge raise would be a major coup for Goldman Sachs, which has been among the Wall Street Banks that have experienced a frustrating year with slowing deal flow in the weaker economic market.
Most private equity firms and other larger private groups keen to float on the Australian Securities Exchange have held off launching initial public offerings until market conditions improve.
DATAROOM EDITOR
Bridget Carter has worked as a writer and editor for The Australian’s DataRoom column since it was launched in 2013, focusing on capital markets, mergers and acquisitions, private equity and investment banking. S...
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