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Valemus floats back up with the market

FOR a range of reasons, the Valemus float is coming back.

It's not just because the Queensland government has decided to hit the investment community for a lazy $5 billion or so for its prize rail assets.

Someone tried to tell us yesterday that the strength of the Australian dollar was a big factor, but we'd pick a stronger sharemarket. Our currency has slayed the US dollar since the $1.1bn construction float was pulled, jumping from below US85c to above US98c in that time, a climb of 15 per cent. But the euro, in which Valemus's Essen-based parent Bilfinger Berger would like to be paid for selling out of Abigroup and Baulderstone, is only three euro cents weaker against our currency than previously.

The big move is in the overall Australian sharemarket, where the S&P/ASX 200 index closed last night at 4619.9, more than 8 per cent higher than it was at 4276.1, back on July 6 when Valemus was pulled and the market had incidentally just come off an eight-day losing streak.

Our spies suggest that the planned issue's co-ordinators at Goldman Sachs, Macquarie and Deutsche Bank are polishing up their presentations and re-doing their numbers pretty hard with a view to getting the issue away early next year. Chairman Nick Greiner would no doubt like to see that, having first watched the Valemus float fall over, then having found the mining consortium he chaired drop out of bidding for a big slice of QR National's assets.

Headhunters busy

ONE door closes, another opens. Don Voelte's announcement yesterday that he's heading for the door at Woodside has handed a big task to headhunters Heidrick & Struggles, who now have to find a replacement for the ebullient Nebraskan. We understand they're hoping to have a shortlist by the end of the year.

They've had a good run in recent years, most notably scoring a double aviation whammy by installing Jetstar boss Alan Joyce at the top of Qantas to replace Geoff Dixon, then placing disappointed candidate John Borghetti as CEO of Virgin Blue. They've also been active in the resources space, not only persuading Jac Nasser to join the BHP Billiton board but also netting South African born wunderkind Marius Kloppers as CEO of Australia's biggest company.

Loyalty tested

NEWS from the QR National roadshows. Not only is there the usual push and shove between investment banks and local institutions over how much the latter want to pay in the bookbuild range between $2.50 and $3, but we hear some retail advisers are reluctant to push the issue to clients unless they get more ammunition to justify the high (21 times or more) price earnings ratio in the offer document for the current year.

But we do know that those local institutions will end up owning big lumps of the stock because they'd be underweight the index otherwise. Among other details we're hearing is that high-net-worth applicants are being breathed on to get their Broker Firm bids in by next Tuesday, with a Nelsonian eye possible in the event of applicants putting in more than one subscription at the $250,000 limit imposed for retail shareholders looking for the promised 10c-a-share discount. The deadline is despite the fact that the formal cutoff date for retail subscriptions is November 12.

The $25,000 application level is likely to be popular. That's the level at which the loyalty bonus for 12-month holders peaks out. You can invest more, but you won't get any more loyalty shares.

Northern rejection

SOUTHERN Cross Equities analyst Fleur Grose has agreed with Northern Energy Corporation's management that New Hope Coal's $1.50-a-share bid, announced on October 8, may not get the bidder over the line. The all-cash bid with a minimum acceptance condition of 50.1 per cent certainly gave the Northern share price a healthy shove from $1.11 to last night's high of $1.575, but Grose says "we see value above $1.50 and believe the board will reject the offer".

Northern Energy's been languishing a bit -- it almost hit $1.70 in April -- because of delays in environmental approvals for its planned Colton coking coalmine near Maryborough in Queensland, although they have now been granted.

We understand the Northern Energy board met yesterday to consider a formal response other than the initial "take no action" advice and we gather they're now working out how many derisive digits to hold up. Northern already has a Chinese buyer for the coal sorted out. All they have to do now is dig it up.

mainan@theaustralian.com.au