Aston Resources IPO Still Being Marketed Despite Valemus Being Pulled-Sources

Bankers are still working on the up to A$500 million Aston Resources Pty. Ltd. initial public offering, despite the high profile Valemus float being pulled from the Australian capital markets overnight, people familiar with the matter said Tuesday.

The Valemus IPO was pulled by German parent Bilfinger Berger AG (GBF.XE) due to adverse market conditions, but people familiar with the situation said Aston and Valemus operate in different markets and indicated that Aston won't necessarily suffer the same fate.

Valemus is an Australian-focused construction company that Bilfinger Berger was selling as part of a broader plan to focus on its services, rather than construction, industry. The Valemus IPO, which was expected to be up to A$1.39 billion in size, was seen as a bellweather to test Australian investor demand after the disappointing multi-billion float of department store Myer Holdings Ltd. (MYR.AU) late last year left a bad taste in investors' mouths.

The Aston IPO could be up to A$500 million in size, one person familiar with the matter said Tuesday.

There is a still chance the deal will be delayed, one person familiar with the matter said, because of the northern hemisphere summer slowdown in the markets and the upcoming August reporting season in Australia, which could prevent underwriters from testing the market until after that is completed.

Aston Resources is privately held by mining investor Nathan Tinkler, who completed the purchase of Maules Creek from Rio Tinto Ltd. (RTP) subsidiary Coal & Allied Industries Ltd. (CNA.AU) for US$480 million in February and has said he is looking to list 15%-20% of the company.

The potential IPO comes at a hopeful time for the coal sector after the government watered down its resources tax proposal, a move that market watchers said could spawn a pick-up in merger and acquisition activity.

Previous takeover target Macarthur Coal Ltd. (MCC.AU) Tuesday upgraded its annual profit guidance on better-than-expected coal sales and on Monday Thailand's Banpu launched a friendly takeover bid for Centennial Coal Co. Ltd.(CEY.AU).

-By Cynthia Koons; Dow Jones Newswires; [phone]; [e-mail]