New York-based Anchorage Capital Group has acquired a slice of debt in collapsed law firm Slater & Gordon, sources told Street Talk on Sunday. 

The news comes after Street Talk revealed on November 7 that Citigroup had offloaded its Slater's exposure at just 38¢ in the dollar to an unnamed syndicate.  

It has since emerged Anchorage was one of the members of that syndicate and now holds a portion of the ambulance-chasing firm's debt stack. 

Bank of America Merrill Lynch facilitated the trades. 

Citi was one of the key lenders and advisers to Slater & Gordon on its disastrous purchase of UK group Quindell's professional services business in March 2015, of which $879 million of the value was written off within 12 months.  

The failed United Kingdom foray has left Slater & Gordon with $682 million of net debt – which if valued at 38¢, implies the law firm has an enterprise value of about $422 million. 

It is understood McGrathNicol is poised to release a report on the company as early as Wednesday. The insolvency firm was appointed by Slater's key lenders, National Australia Bank and Westpac, in January to take a closer look at its books.

Anchorage is one of the largest holders in Alinta Energy's debt stack alongside TPG and Oaktree Capital Management.

 

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Hong Kong's Cheung Kong Infrastructure Holdings has tabled a $3 a share bid for DUET Group, sources told Street Talk.

Morgan Stanley is advising CKI, while Macquarie Capital is tending to DUET.

The indicative, unsolicited offer was submitted last week. DUET's board is expected to respond on Monday, sources said.

DUET's portfolio of assets includes the Dampier Bunbury pipeline, two thirds of Victorian-based electricity distributor United Energy, gas distribution business Multinet, pipelines business DBP Development Group and Energy Developments.

The latter was acquired in a $1.4 billion all-cash deal in July 2015.

The deal helped boost Duet's net profit for the year to June 30 by 307.1 per cent to $195.8 million. Stripping out significant items, Duet profit rose 153.5 per to $195.2 million, with revenue up a more modest 29.1 per cent to $1.64 billion.

Cheung Kong's move comes just months after it was blocked from bidding for the New South Wales' Ausgrid assets by Treasurer Scott Morrison over concerns around national security and foreign buyers.

The company's extensive holdings in Australia include stakes in South Australia's ETSA, Victoria's Citipower and Powercor and 8.5 per cent stake in Spark Infrastructure.

CKI's offer is conditional on due diligence and subject to Foreign Investment Review Board approval.  

Sources suggested DUET's ownership of United Energy might give rise to FIRB issues given its critical role in the Victorian power sector - not unlike Ausgrid's role in NSW.

DUET shares have fallen 6 per cent from $2.50 at June 30 to close on Friday at $2.35.

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Fund managers will be forced to sell down their stake in takeover target Tatts Group if they want to follow the strict rules around their mandates.

Hot on the heels of Tabcorp's 10 per cent raid, Standard & Poors will now re-jig the weighting of Tatts in the major benchmark S&P ASX 200 index when the market closes on Friday.

The index provider will cut the weighting of Tatts and managers will probably end up selling as much as 10 million shares.

If they don't sell, it's more of a bet on Tatts outperforming and so it's expected that most managers will cut their stake to match the new weighting.

Fears that another suitor could scupper its $11 billion bid for Tatts drove Tabcorp's move to grab control of a 10 per cent stake in its rival last week.

As revealed by Street Talk, Tabcorp through its banker UBS went into the market to build a stake in Tatts.  

 

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A sale by CSR of its Tomago Aluminium smelter stake would initially be earnings dilutive but also "refocus investors" on higher quality assets, according to Deutsche Bank.

Analysts led by Deutsche's Emily Smith noted that management of building materials group CSR had outlined that the 25.2 per cent stake in the Tomago smelter  was non-core.

"Based on our forecasts, a sale of Aluminium would be circa 6 per cent EPS (earnings-per-share) dilutive in FY18," she said in a note to clients, adding her numbers were based on the assumption the aluminium holding was divested for $167.2 million.

"However, we believe a sale will likely refocus investors on its high quality building products assets which should attract a higher multiple. Further, we believe Australian housing demand will likely remain strong for the next 24 months, with FY18 starts expected to remain flat vs FY17.

"Importantly CSR is underweight the currently weak WA housing market."

Deutsche has a "buy" rating on CSR citing factors including valuation upside and re-rating potential, continued strength in the Australian housing market and potential upside from March 2017 building products price increases.

Smith noted downside risks to her assessment of the stock included a softer housing recovery than expected. 

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UBS has won the mandate to sell Archer Daniel Midland's stake in GrainCorp, fund manager sources told Street Talk.

The investment bank bought the 19.9 per cent shareholding in the Australian grain giant for $8.53 a share, having secured substantial demand from fund managers on Thursday night.

The block trade is valued at $387 million.

It's understood a handful of long-only institutions have snapped up the stock.

Street Talk revealed equity capital markets teams had started pitching on ADM's stake on Thursday afternoon.

The long-awaited block trade comes three years after ADM's $3 billion bid to buy the ASX-listed company was blocked by Australia's then-Treasurer Joe Hockey. 

ADM acquired the stake in 2012 as part of the takeover deliberations. It has been sitting on GrainCorp's register as a frustrated investor for the bulk of the time since. 

GainCorp shares last traded at $8.71, above the $8.50 level ADM was seeking to offload its holding in July.

That ill-fated sale saw ADM hire Lazard Australia to run a "blind date" pitching process, pitting Goldman Sachs, Morgan Stanley and UBS's equities teams against each other in a content seeking best price and terms. 

ADM then opted to retain its shareholding in the Australian grain giant after bids came in around the $8 mark and none of the offers were for the entire stake.

The GrainCorp sell down comes amid a bumper year for wheat growers, with a record crop fuelling hopes of strong financial returns.

But last month GrainCorp chief executive Mark Palmquist moved to temper investor expectations of a big jump in profit due to a global oversupply of grain and the timing of the harvest.  

"While this year's larger crop is welcome, harvest is at least three weeks late this year and there is a long way to go before it is all stripped and in the bin," he said.

GrainCorp reported a 3.7 per cent fall in statutory net profit to $30.9 million in the year ended September 30, which was dragged down by $21.8 million in one-off costs. Underlying net profit of $52.7 million was 18.4 per cent higher than the prior year, while full-year revenue rose 1.8 per cent to $4.158 billion.

In September, GrainCorp abandoned a $1 billion plan to list the nation's biggest wheat exporter, CBH Group, on the ASX after it was unable to gain traction with CBH's 4200 growers. 
 

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