Good evening,

Need proof deals are much harder to get away this year? Look at Tuesday.

Exhibit A: Ramsay Health Care. KKR turned up with a heavyweight syndicate, what looked like a cosy relationship with the company’s biggest shareholder, an offer high enough to get due diligence and a litany of bankers and other funders willing to get behind the country’s biggest ever leveraged buyout.

Five months on, it’s gone to the dogs. KKR and Ramsay don’t see eye to eye on price, Ramsay’s business has softened, funding markets have shifted materially, and the whole situation’s either on life support or dead, depending who you believe.

Exhibit B: Link Administration Holdings. As Link approaches its two-year anniversary of being in play, the company finally looked set to be gone from the ASX boards. Dye & Durham (suitor No.3), with its re-cut offer, was happy, Link’s shareholders approved the bid, and the ACCC gave it the all-clear.

Only days out from the second court hearing (Link’s end of life as an ASX-company hearing), the poison pill that was hiding in plain sight all along reared its ugly head. The UK’s FCA has threatened to sting Link with the sort of fine that would make anyone blush, least of all a highly leveraged buyer.

The deal’s also now in ruins, and will likely need serious surgery to survive.

Exhibit C: Atlas Arteria. When was the last time a company signed a $3 billion-odd acquisition and then went to shareholders to talk about equity-raising structures? It doesn’t happen.

Add in a 15 per cent renegade and activist shareholder, an acquisition at a big price (about 42 times earnings) and an already tough dealmaking environment, and we have an interesting situation on our hands.

Atlas Arteria was trying to pull the rights issue together on Tuesday night. From what Street Talk could gather, it was talking to funds about an over-raise; $3.1 billion at $6.50 a share or so, which would pay for the equity stake in Chicago Skyway, transaction costs and leave some money left over for its Dulles-Greenway toll road.

It’s a big task – and a very interesting one for underwriters RBC Capital Markets and UBS.

We look at Atlas Arteria in Street Talk tomorrow, and also check in on some curious buying at Peter Warren Automotive and Australian Agricultural Co.

Happy reading,
Anthony Macdonald, Sarah Thompson and Kanika Sood
Street Talk editors