By PAUL PANCKHURST
Tranz Rail's directors yesterday told shareholders to reject Australian suitor Toll Holdings' 95c-a-share takeover offer and said they were "doing all they can to encourage superior offers and alternatives".
Asked what this meant, chairman Wayne Walden said: "We're not out actively soliciting - but clearly if anyone is
out there that wishes to present bids, we would welcome that."
He would not speculate on the price Toll needed to offer to win the board's backing.
The board said it agreed with a Grant Samuel report that the Toll offer was not fair to shareholders.
It also said the offer was highly uncertain because of the requirement for a 90 per cent minimum acceptance - major shareholders indicated that was unlikely - and was below the current market price.
Walden warned that shareholders who accepted would be stuck if an alternative later emerged.
Toll Holdings managing director Paul Little earlier said Toll had asked for a conditional recommendation from the Tranz Rail board - "albeit if they say, 'Look, we like the Toll offer but we don't like the price'."
Walden had not seen that as an option.
"The guts of the offer is the price, isn't it?"
The offer is open until August 29.
Tranz Rail intends to send a target company statement and the Grant Samuel report to shareholders on Monday.
Toll managing director Paul Little said the advice from the Tranz Rail board could only be described as "irresponsible".
Noting that the board was trying to encourage superior offers, he said: "Telling shareholders to turn down 95 cents on the off-chance that directors can magic up another bidder who may be prepared to offer more is nonsense.
"The directors appear to be acting in their own self interest, with no regard to shareholders who only a matter of months ago saw their shares fall to 40 cents under the direction of this same board and its management.
"Their advice lacks credibility and more importantly takes no account of the consequences to shareholders if the Toll bid does not go ahead.
"If there is another bidder say so and if there isn't then they should be mindful of their responsibilities to act in the best interest of those they represent."
