Ferrovial keeps its Aussie options open

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Broadspectrum chair Diane Smith-Gander and boss Graeme Hunt are talking tough to Spanish suitor Ferrovial, demanding a higher offer from its chief Santiago Olivares, but the detention centre operators might want to remember there’s more than one girl at the dance.

As Broadspectrum clings to its contract to run PM Malcolm Turnbull’s offshore refugee camps, Olivares and his team are looking elsewhere for expansion.

The Spanish giant is in talks in London with international engineering outfit Laing O’Rourke, with whom it has had previous joint-venture relationships. The pair know each other well.

Laing O’Rourke has already said its $1 billion Australian operation is for sale, in a process being managed by HSBC.

Ferrovial walked away from its first tilt at Broadspectrum (then Transfield Services) a year ago at a time when the detention deal was more certain. This time it’s bid $1.35-a-share and the contract is no sure thing, with Broadspectrum shares at $1.16.

Olivares only needs one of Broadspectrum or Laing O’Rourke to establish an Aussie beachhead. The Ferrovial bid can lapse from Monday.

Serco in the race

Broadspectrum could be up against heavyweight Serco, which is warming up to snatch the billion-dollar offshore camp contract from next year.

The British outsourcing giant already runs onshore centres and remains the candidate most likely to bid against Hunt and Smith-Gander for the company-defining offshore contract.

At last count Serco turned over $1bn a year in Australia, boasting more than 6300 employees, but made a loss of $400 million after a large goodwill write-off.

It’s leaving nothing to chance in Canberra, with lobbyists David Gazard and Jonathan Epstein (one-time business partners with former treasurer Peter Costello) from ECG Advisory Solutions on the job for the prison operator.

Broadspectrum has enlisted former Howard staffers Michael Photios and Nick Campbell from Capital Hill Advisory to lobby on its behalf for the controversial contract.

Taxing times

Mad-as-hell Tax Commissioner Chris Jordan’s decision to slug James Packer’s Crown empire with a $360m tax bill is an unwelcome distraction for the casino magnate, who would no doubt prefer to spend his time canoodling squeeze Mariah Carey or figuring out how to privatise the globe-spanning gambling group.

As Mariah belts out three shows a week at Caesar’s Palace, down the road the decidedly downmarket Cannery complex — one of three controlled by the Cannery group — continues to cause conniptions at Crown.

Jordan’s tax slug adds unwanted wrinkles to the already complex task of arranging and funding any privatisation of the $8.5bn Crown Resorts empire — and sheds some light on the Byzantine structure used for the aborted Cannery takeover.

In a cryptic note to the ASX on Monday, Crown said the bill covered 2009-2014 and related to “some of the financing for Crown’s investment in Cannery Casino Resorts and other investments in North America”.

Crown trumpeted the Cannery deal in late 2007, promising to pay the $US1.75bn price from “existing cash reserves”.

But Gretel Packer baulked at disclosure requirements associated with probity, and the deal was downscaled to buying a quarter of the operation for $US370m — a good thing, as Cannery’s value was destroyed in the GFC.

The stake is held in a complex structure that sees no fewer than six entities interposed between Crown and Cannery, including a general partnership registered in the US state of Delaware.

Just the kind of web that makes the increasingly impatient Jordan cranky.

It also turns out Crown didn’t pay for the now ill-fated investment with cash after all: a note to its 2009 accounts shows it wrote off $54.8m in interest payments related to the deal.

Campus capers

Elsewhere in Packerland, niece Francesca, heiress to her mother Gretel’s own billion-plus fortune, continues her global jaunt in English uni town Cambridge.

The young Packer is set to resume her studies at a Melbourne Uni when the academic year resumes at the end of this month to be closer to beau Kelli Holland, who works for his property developer dad.

The 21-year-old has flitted between Paris, New York, Mexico, Miami and Disneyland.

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