Thiess lag may be about price

CIMIC has said it is confident of announcing a deal to sell a 50 per cent interest in its mining services business, Thiess.

CIMIC has said it is confident of announcing a deal to sell a 50 per cent interest in its mining services business, Thiess, within days to Elliott Management, but some believe the hold-up is likely to be because the global hedge fund is playing hard ball when it comes to price.

The Australian-listed CIMIC tried to sell Thiess last year through JPMorgan, but finding a buyer for what is considered one of the world’s best mining services providers did not prove to be an easy exercise.

While mining services businesses like Thiess are currently performing strongly with the resources industry in full steam in Western Australia, they remain unpopular with many investors due to their slim margins and, for some, their exposure to coal.

One line of thought is that Elliott sees itself as strongly positioned to drive a hard bargain with CIMIC, as its European parent comes under pressure to reduce debt through asset sales.

Last Friday, CIMIC said a transaction involving a new equity investor for Thiess was well progressed. The investment by Elliott was originally announced in July, and the time taken for the deal to be finalised has been a surprise to some.