The dramatic deal cut between Liberals and Pauline Hanson's One Nation (PHON) is not just upsetting the political apple cart. It could have ramifications for the nation's investment bankers keen to share the spoils of the $3 billion-plus float of the state's south-west electricity poles and wires, Western Power.
On the one hand it gives Colin Barnett's Liberals their best shot at securing a third term.
But by scuttling the WA Nationals, their alliance partner for the past eight years, they may also be driving a nail in the coffin for the float.
Senator Hanson has repeatedly ruled out any sale of Western Power. A preference deal will cement expectations PHON will gain the balance of power in the upper house.
Of course, not all are losing hope.
Well placed sources believe if Barnett is returned following the March 11 election – on a platform to sell 51 per cent of Western Power via an ASX listing that would also allow it to shift $8 billion off its books – he would have a mandate to sell.
But nothing is certain in politics.
The Liberal-National government has not appointed any banks to the deal yet – it first needs to win the election.
But if it does – and PHON don't block the float planned during 2018 - UBS, Macquarie, Goldman Sachs and Rothschild are the front runners for joint lead manager status. Those advisors provided input to the government ahead of its decision to sell the asset in November.
Elsewhere in WA, mandates for a refinancing at underground mining services group Barminco may be awarded next week.
As revealed by Street Talk on Monday, short-listed banks are due to lodge detailed commercial proposals early next week ahead of a decision on who will run the recapitalisation.
The decision is said to depend on the structures proposed including whether Barminco should refinance in the US high yield bond market or the US term loan B market. It will also feed into Gresham Private Equity's slated float of the business in late 2017 or early 2018.
Banks are competing hard for the refinancing proposal to position for a role on Barminco's run at the ASX boards.
Gresham bought a majority stake in Barminco in 2007 from founder Peter Bartlett. He retains a holding in the company and a seat on the board.
This month, Barminco finance chief Peter Bryant told The Australian Financial Review the company wanted to have the refinancing well and truly bedded down before the bonds are reclassified as current debt at the end of May 2017.
