James Packer's push to privatise Crown Resorts appears to be picking up pace ahead of the casino operator's interim results later this month.

Just one week after Street Talk revealed the gambling mogul had initiated talks with US property giant Blackstone Real Estate about a deal, we can reveal another North American investor that has been in and around the discussions. 

The state-run Canada Pension Plan Investment Board, which has about $275 billion under management, is understood to have been approached to invest with Packer's Consolidated Press Holdings for a partial or full privatisation of Crown.

It is not known whether the CPPIB talks remain live, however it is another indication about the serious types of investors the Australian billionaire's camp is courting. 

CPPIB certainly has the financial firepower to fund a deal. Faced with a commodities slump even larger than that being experienced in Australia, Canada's pension funds have become big players offshore as they comb markets for long-term deals.

CPPIB splashed more than $US67 billion on assets in 2015 including $12 billion on a GE unit and $US650 million on a loan to an Atlantic City casino. It also teamed up with private equity giant CVC on a $US4.6 billion deal to buy pet supplies company Petco.

If it does place a privatisation bet with Packer, it would follow another Canadian pension fund, the Ontario Teacher's Pension Plan, which bought UK lottery operator Camelot, albeit for a smaller sum.

Sources close to the discussions say a possible deal between Packer and a quasi sovereign wealth fund like CPPIB could be a good fit. Pension funds need to make 6 to 7 per cent returns for their members, which is not an easy task in the low interest rate environment. 

That means the predictable cashflows generated by Crown's growing global casino footprint may make it an ideal silent partner over a decade or even 15 years compared with the shorter three to five year horizon generally favoured by private equity investors.

Elsewhere in capital markets, Macquarie's equities desk scored the first block trade of the new year when it sold a 4.3 per cent stake in Estia Health for private equity firm Mercury Capital after market on Tuesday. 

As first reported by Street Talk, Macquarie sold the shares at $6.65 which was a 3.2 per cent discount to the last close.  

Mercury Capital, a New Zealand-based private equity firm, had been an Estia shareholder since before the company's initial public offering in December 2014. The IPO was handled by UBS, Deutsche Bank and Morgan Stanley. 

For Macquarie, the trade comes as it seeks to stamp its dominance in the aged care sector. The investment bank floated Japara Healthcare and Regis Healthcare in 2014.

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Patersons Securities is bracing for a dramatic management shake-up as part of a restructure aimed at shoring up the 113-year old stockbroking house. 

Street Talk understands Patersons will unveil a new strategy this month, aimed at making the broking house smaller, more nimble and profitable in a tough climate for both brokers and Patersons' resources-heavy client base. 

It's understood the restructure could lead to significant management change with top dogs Michael Manford, the firm's executive chairman, and corporate finance chief and executive director Aaron Constantine, believed to be considering their positions. 

Sources said the restructure could also see Patersons exit some of its smaller and loss-making offices, clawing back its scale to focus on profitability. 

The restructure comes after four straight years of losses at Patersons and a $2.2 million capital injection last year. While stockbroking and retail client advice is a tough industry - and widely regarded to be getting tougher - recent results from rivals Bell Potter Securities and Shaw & Partners show it is possible to be profitable. 

For Patersons, the restructure also comes after prolonged consideration about the firm's future.

The broker's traditional client base of small cap resources, minerals explorers and mining services providers is suffering at the hands of the commodity cycle. Resources stocks account for only 10 per cent of Australia's benchmark index and the next generation of resources stars are struggling to attract the capital and attention needed to be successful. 

The broker had 310 employees at June 30. 

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After missing out on buying Mitre 10 to Metcash five years ago, Phil Cave's Anchorage Capital is said to be crunching the numbers on hardware after Woolworths' decision to pull the plug on Masters and Home Timber & Hardware.

Industry sources believe Cave's Anchorage Capital Partners is one of at least two private equity firms that have been speaking to Metcash about a merger of Mitre 10 and Home Timber & Hardware.

One proposal said to be doing the rounds is a joint venture whereby Metcash would retain a sizeable stake in a new vehicle that would own Mitre 10 and HTT, the hardware wholesaler formerly known as Danks.

As reported in Street Talk in October, a merged Mitre 10 and HTT would have annual sales around $2 billion, earnings around $50 million and would supply almost 900 stores. The merged group would have about 5 per cent of the hardware market – a quarter that of market leader Bunnings.

Anchorage may have a better chance of gaining the support of Metcash than other private equity players because of links between Phil Cave and  Metcash chairman Rob Murray.

Murray, the former Lion chief executive, succeeded Cave as chairman of retailer Dick Smith in 2014. It's said that the relationship between the two remains solid.

Cave tried to buy about 49 per cent of  Mitre 10 in 2009 but was outbid by Metcash, which paid $55 million for 50.1 per cent and  bought out the remaining shares a few years later.

While Mitre 10 has been a successful investment for Metcash, the food and liquor retailer has failed to achieve its growth ambitions. Earnings have improved from around $18 million to $30 million rather than the $40 million that Metcash was originally aiming for.

In contrast, HTT's earnings have doubled to $20.9 million before interest and tax.

With Metcash now focusing on restoring growth in its core food and groceries business, it's thought that Murray could be persuaded to sell at least half the Mitre 10 stake.

Elsewhere, equity capital markets teams are preparing pitches for factoring company Scottish Pacific's potential initial public offer, with request for proposals expected to be sent out as early as Wednesday. 

As revealed by Street Talk, Scottish Pacific, advised by Reunion Capital Partners, and owner Next Capital will formally call for pitches this week after informally meeting with investment banks in recent weeks. 

 

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Macquarie Capital and Fort Street Advisers have their work cut out for them.

With only two months to go until a vote on DEXUS's $2.5 billion takeover of their client, the Investa Office Fund, it is easy to see how the vote could be unsuccessful. 

While the IOF camp remains confident, Street Talk understands Morgan Stanley, BT Investment Management and APN Property Group will all vote against the proposal. Exactly how key swing investor CBRE Clarion Securities will vote is not clear.

Collectively, the four big shareholders account for nearly 25 per cent of the shareholder register. Given the deal is structured as a scheme of arrangement, IOF needs at least 75 per cent of votes cast to be in favour. 

All would like more cash in the offer and all would welcome a rival offer.

The barrier to Morgan Stanley voting appears to have cleared. The US investment bank is on track to sell the Investa Office management platform to Investa Commercial Property Fund this month. 

ICPF unitholders are scheduled to vote next week to internalise and buy the platform, potentially dissolving Morgan Stanley's conflict of interest in a DEXUS and IOF vote. Morgan Stanley is unlikely to vote for a merger with DEXUS if it has just sold the management rights to IOF to ICPF as part of the platform sale.

APN Property Group and BT Investment Management will also vote down the proposed merger although they are small compared with Morgan Stanley and CBRE Clarion.

The other key IOF shareholder is CBRE Clarion, with more than 10 per cent.  There is conjecture over what way CBRE Clarion will go but the group wants a higher cash bid and has been vocal about it.

Potential rival bidders could be ICPF or even Chinese giant China Investment Corporation.

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The big financial planning groups are poring over NSW adviser StatePlus, as the government tests trade interest ahead of a likely initial public offering. 

Sources said investment bank Macquarie Capital had sent an information memorandum to potential trade buyers such as Perpetual, IOOF, BT Financial Group, AMP and the Big Four banks in the past week, explaining the business and its financials to interested parties. 

StatePlus is the financial planning business owned by SAS Trustee Corporation, which is the trustee of a number of public sector superannuation schemes. It provides specialist retirement advice mostly to NSW state government employees, with about 60,000 clients, 160 planners and $16 billion under management. 

The information memorandum's release shows SAS Trustee Corporation is serious about offloading the business, after some months preparing the unit for sale. 

Macquarie is advising SAS Trustee Corporation, while StatePlus is working with Reunion Capital Partners. 

Street Talk revealed the potential sale plans last year. The sale is being run as a dual track process, with trade interest to be courted while StatePlus also prepares for a potential IPO. 

It is expected to be worth more than $1 billion. 

StatePlus, which was formerly called State Super Financial Services, met with fund managers last year in an effort to gauge interest in the business. 

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