Investment banks Credit Suisse and Goldman Sachs are tipped to win joint lead manager mandates to oversee the initial public offering of electronics retailer, The Good Guys. 

Sources said on Tuesday night that formal mandates had not been awarded. However, Street Talk understands late stage discussions continue with The Good Guys and its advisers, finalising fees and other matters.

Bank of America Lynch has been advising the company on talks with potential trade buyers in recent months and remains well-placed to secure a JLM role.

It come after a handful of banks pitched for the mandate a fortnight ago. Private equity buyers are also watching the situation, sources said.

Based on annual sales of $2 billion and estimated earnings before interest tax depreciation and amortisation around $110 million, The Good Guys could have an enterprise value, including debt, of up to $1 billion.

 

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CHAMP Ventures associate director Adrian Kerley is leaving the firm and will head up Commonwealth Super Corporation's private equity portfolio, limited partner sources told Street Talk on Tuesday night.

Commonwealth Super has about $40 billion under management and oversees the superannuation of government, public service and military employees. 

Kerley joined CHAMP Ventures in 2009 and is a non-executive director of Scentia (the parent company of the Australian Institute of Management Education and Training business and Ivy College), Macpac, Cater Care and TR Group and is actively involved in Lorna Jane.

He also led the exits of CHAMP Ventures' investments in TSmarine, APB Modular and SG Fleet.

Prior to joining CHAMP Ventures, Kerley spent seven years at Woolworths.

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Goldman Sachs is seeking a buyer for the firm's $9 billion Australian equities funds management business run by well known stockpicker, Dion Hershan. 

Street Talk can reveal that the investment bank is considering strategic options for its wholly-owned Goldman Sachs Asset Management's domestic equities team, including a sale, partial sale or even a management buyout, led by Hershan. 

Sources said the process would consider whether Hershan's 40-person team, which includes portfolio manager Katie Hudson and industry veteran Geoff Frankish, would have more success raising fresh funds under a boutique model, at a time when asset consultants and their big superannuation fund clients seek managers who can retain key staff with significant ownership stakes. 

It means the industry continues to shift towards boutique managers for active investment, while large pension money managers such as AustralianSuper and IFM Investors bulk-up in-house teams to manage large licks of capital. 

Goldman Sachs' review is not expected to extend to the firm's Australian fixed income asset management business, at this stage. 

Hershan's Goldman Sachs Australian Equities fund returned 7.5 per cent a year over the past five years, according to Mercer's investment survey released on Tuesday.

The median return among long-only managers in the same period was 7.6 per cent, according to Mercer's performance numbers as at the end of April. 

The move comes amid some change in the local funds management industry.

ASX-listed Wilson Group announced on Tuesday it would snap up the 25 per cent of Pinnacle Group it did not already own. Pinnacle is best known as the owner of Hyperion Asset Management, but is also home to the likes of Plato Investment Management, Solaris Investment Management and infrastructure investor Palisade. 

Pinnacle has $19.25 billion in funds under management and accounted for all of Wilson Group's profit in the first half of 2016. Blackpeak Capital advised on the deal. 

Elsewhere in funds management, private equity giant The Carlyle Group has picked up former Hastings Funds Management executive Richard Hoskins as it seeks to bolster its infrastructure investment credentials. 

As Street Talk revealed on Tuesday, Hoskins has joined Carlyle as a managing director and will work alongside his former Hastings colleague, Peter Taylor. 

Hoskins spent about 10-years at Hastings and was head of its equity and debt committees. He is currently on the boards of a number of infrastructure assets including NSW electricity transmission network TransGrid and Perth Airport. 

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Rupert Murdoch's News Corporation is up against an Asian group and private equity as APN News & Media pushes ahead with the sale of its regional publishing business in Australia.

With the process run by investment bank Credit Suisse reaching its second stage, News Corp remains the favourite to pick up the portfolio of mostly-Queensland regional titles which includes Mackay's Daily Mercury (Mackay), Rockhampton's The Morning Bulletin and The Chronicle in Toowoomba.

Two other parties are still in the race: Singapore-based investment group Fetch Plus; and an as-yet unidentified private equity firm with sources pointing to mid-market investment house Allegro Funds.

Fairfax Media, publisher of The Australian Financial Review, is not interested in doubling down on regional publishing in the Sunshine State where cost savings would be difficult to achieve.

News Corp, which already owns 14.9 per cent of APN, has more titles in Queensland and would therefore be able generate more savings by consolidating operations.

But it remains far from certain News chief executive Michael Miller - a former APN boss - will be willing to pay the $50-$60 million APN would like for the business. A multiple of close to one-times operating earnings of $15 million is more realistic, according sources close to the process.

There was a wonderful rumour that the Wagner family had been sniffing around the process. The BRW rich-listers built Toowoomba's Wellcamp Airport which opened in 2014. Radio broadcaster Alan Jones was none too happy about the construction of the airport and even attempted to enlist former Prime Minister Tony Abbott in his campaign to have it shut down..

Having the local paper onside would have helped the Wagners in the event of any future opposition. But it seems the scuttlebutt about them branching into regional media is off the mark.

Finally, Morgans is booking investor meetings for initial public offering-hopeful and plastic pallets company Range International. 

As Street Talk revealed on Tuesday, the firm booking potential investors for the non-deal roadshow and is seeking to pitch the company as a $100 million-plus industrials business. 

The mooted IPO follows a successful seed capital funding round, which saw the company swamped with demand. 

While Morgans has a spot on the IPO ticket, other brokers are believed to be circling the situation. 

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Woolworths' decision to scale back orders for the supply of private label beer from Perth-based brewer Gage Road Brewing has raised questions about the retailer's plans for its 25 per cent equity stake.

While Woolworths' new supply contract with Gage Road has been extended until 2019, market sources told Street Talk Woolworths is likely to quit the brewer's share register sooner rather than later to focus on problems closer to home.

Woolworths' 100 million shares are currently worth $5 million, or 5 cents a share, well below their value a few years ago, when Gage Road shares were trading around 25 cents.

Rather than sell its stake in one fell swoop, Woolworths is likely to offload the stock through a series of placements or a bookbuild once the market has had a chance to absorb managing director John Hoedemaker's growth plans.

Woolworths accounted for 52 per cent of Gage Road's sales in 2015, but by the end of this year  Woolworths is expected to account for 47 per cent of sales.

Woolworths' proportion of sales will fall away dramatically as Gage Roads increases sales of its award-winning craft beers. 

According to a lengthy presentation lodged with the stock exchange this week, the brewer plans to increase its market share on the East Coast, tapping bottle shops and hotels, and increase capacity by around 50 per cent or 6 million litres to around 17 million litres.

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