takeover speculation

Street Talk
Author: Edited by Anthony Hughes ([email protected])
Date: 18/05/2006
Words: 1623
Source: AFR
Publication: The Financial Review
Section: Market Wrap
Page: 24


Yates goes hunting for debt collectors
What'll he think of next? That's what observers are asking of Peter Yates, the former Macquarie Bank executive and Publishing & Broadcasting Ltd managing director who has re-made his career as a private equity investor.

With the ink still to dry on his acquisition of Baycorp's collection services division, talk has shifted to further consolidation and the possibility that Yates's Allco Equity Partners could add Collection House to create a portfolio of debt collection operations.

AEP bought the Baycorp business in conjunction with DB Capital Partners, and together they are thought likely to also roll up DB's privately owned debt collector, Portfolio Management Group.

Separately, there are rumours that Collection House, a stock that has had the odd brush with controversy under founder John Pearce, is on the radar of acquisitive Gold Coast financial engineer MFS. Collection House may be willing to accept a private equity bid given its recent earnings woes and high debt. At current prices, Collection House is worth about $100 million though the board is said to be open to a bid at about the $120 million mark or $1.25 a share. Speculation around Collection House after a recent share price rise has also resulted in some fingering Credit Corp as a buyer, but it is unlikely to be interested. Edgy investors in resources may want to switch to IT. Ord Minnett's $80 million float of IT outsourcing group DWS is said to be getting a good response ahead of the launch (especially from institutional investors). Another impending float is Arasor, a US-based maker of communications and circuits for wireless communications. Arasor is expected to raise $30 million to $40 million through Paterson Securities and have a market capitalisation of about $100 million.