Blackstone leads trade bidders in race for Moly-Cop

The future of Arrium’s ­Moly-Cop business will be known by Monday, with three parties understood to be in the final stages of the contest with the bidders going head to head with equity investors.

Blackstone is believed to have lobbed an offer, along with Platinum Private Equity, and there are suggestions that US-based buyout firm KPS Capital Partners, which is relatively unknown in Australia, is also in the mix.

The firm has $US5.5 billion of assets under management and owns a business that supplies heavy equipment.

Bids from equity investors are due by Friday, with investment banks working on the deal asking for cornerstone bids for 100 per cent of the business.

They want to approach Arrium’s voluntary administrator KordaMentha with a deal that indicates that the entire book would be covered at a particular price.

It is understood that the offers are expected to come in at least seven times its forecast annual earnings, although a book covered at more than eight times is likely to be needed to beat the trade bidders, considering the business is worth between $US1bn and $US1.3bn ($1.3bn-$1.7bn).

Of the trade bidders, Apollo and Bain Capital have left the competition while Platinum is not expected to get there on price, leaving Blackstone as the favourite in that side of the contest.

The latest chatter surrounding Moly-Cop comes after administrator KordaMentha secured approval this week to restructure the head company and sell the remainder of the operation.

KordaMentha released the creditors report, which determined that more work would be required to determine whether the company’s directors traded while insolvent.

One point of concern among equity investors eyeing Moly-Cop is competition from a major Chinese player in the Chilean market.

Meanwhile, advisers working on the float of Inghams Enterprises are understood to have scaled back orders from retail investors ahead of the listing of the company next month on the back of strong demand.

Australian Super, which is an investor in Ingham’s global fund, is injecting at least $100m into the float, but will be paid a 0.75 per cent fee of the $100m committed amount.

It also comes as petrol station owner United Petroleum puts its IPO plans for this year on ice.