bhp...again ?

JP Morgan sees takeover play for Echo by rival Crown in 2012

* Says BHP may bid for Woodside; Woolworths may bid for JB Hi-Fi

* Predicts Aston Resources may attract counter bid

By Miranda Maxwell

Jan 12 (Reuters) - Casino owner Echo Entertainment is Australia's No. 1 contender to be taken over in 2012 in a year likely to be dominated by acquisitions in resource companies, according to JP Morgan's hedge fund sales desk.

Woolworths may bid for electronic retailer JB Hi-Fi , BHP Billiton could consider reviving a tilt for Woodside Petroleum, and Aston Resources is in the running to snare a counter bid, the JP Morgan sales desk team predicted.

Since starting the "Specialist Sales Top Takeovers List" two years ago, JP Morgan has successfully picked 18 Australian takeover stocks, it said, including Sundance, Extract Resources, Foster's and Equinox Minerals.

Top of its 2012 list was a play for Echo, owner of The Star casino in Sydney, by James Packer's rival Crown casino group.

"Echo is our highest conviction takeover target for 2012," JP Morgan said in the report obtained by Reuters.

"Now is the time that Crown has to move if it wants to buy the company at a decent price. Once the (Star casino) capex benefits start flowing through to the bottom line, the share price might be out of reach," it said. Crown already owns a 4.9 percent stake in Echo.

Another possible 2012 play was a takeover of JB Hi-Fi by supermarket leader Woolworths, which has almost completed a strategic review of its Dick Smith consumer electronics division.

"There is a good chance that Woolworths will bid for JB Hi-Fi. This will lead to Woolworths having the no 1 consumer electronics business in Australia," the report said. It said a hedge against buying JB Hi-Fi in the event of further weakness in retailers would be to short Harvey Norman .

"In this volatile market, we believe all pre-event situations should have a good hedge as protection," the note said.

Aston Resources had a "good chance" of getting a counter bid as its world class Maules Creek asset was the largest coal project in Australia by reserves not owned by one of the majors and this could be the "last opportunity before it becomes part of a much bigger portfolio of assets," it said.

Aside from buying Echo, Aston and JB Hi-Fi -- while going short on Crown, BHP and Harvey Norman as a hedge -- JPMorgan said its other top trade idea was to buy Woodside Petroleum and go short on Worley Parsons.

"With Woodside trading close to its GFC (global financial crisis) lows, we believe BHP may finally make a move on it this year," the report said, noting Shell's remaining 24 percent stake is for sale.

Other possible takeover targets listed were gaming company Tabcorp by Tatts Group, building materials group Adelaide Brighton by Fletcher Building, possibly with Boral as a joint bidder, Graincorp and Transurban.

Real estate firm FKP Property Group was seen as a possible target for Stockland, Centro Retail Australia or Mirvac for Lend Lease, and IOOF Holdings for AMP or a top bank.

Resource companies seen as likely targets include Sandfire, PanAust, Discovery Metals, Oz Minerals , Bathurst, Santos, Buruenergy , Senex, Atlas Iron, Aquila Resources , Ironore, Regis, Perseus, Medusa, Paladin, Iluka Resources and Mirabela.