Mainfreight 'blocking efficiencies', says Toll Holdings

Millions of dollars are being lost for shareholders because Mainfreight will not discuss ideas it has for transport efficiencies, Toll Holdings claims.

The Australian and New Zealand logistics companies have been at loggerheads since Toll blocked Mainfreight's full takeover of rival Owens Group last year.

Toll managing director Paul Little appeared to be in a somewhat more conciliatory frame of mind yesterday when he said Mainfreight's belief that his company was out to obliterate it was incorrect.

All Toll wanted to do was propose solutions that would make transport more efficient, although he did not elaborate.

"There are millions of dollars sitting around there to be won if we get our heads together on how to be more efficient," he said.

Toll bore no bitterness towards Mainfreight and, he said, chairman Bruce Plested was a decent person.

When Toll bought 12 per cent of Owens from AMP, it effectively forced Mainfreight to keep Owens listed as well as preventing it from accessing cashflows.

Mainfreight said Toll should not have taken a hostile stake if it wanted to do business with it. If it was unhappy with Mainfreight's investment in Owens, it should sell out.

However, Little said that was not an option. "The stake in Owens gives us some leverage to try and make sure that we sit down and work through these things," he said.

" If we sold the stake and then sat down, we'd have no leverage with a group that is obviously pretty hung up about us."

Plested likes to keep a toy scorpion on his desk to remind him the Australians are smiling scorpions likely to sting.

Little said he had had two meetings with Plested, one in Australia and one in New Zealand.

"Those discussions, which were initiated by us, did not achieve a great deal."

Toll was blocked from a total takeover of Tranz Rail last year when shareholders held out against its offer. But it has control of the rail, road and ferry operator and has sold the track back to the Government.

Toll NZ, the renamed Tranz Rail, and Owens will disappear from the sharemarket when a way of taking out the minorities is found.

Toll's senior executive team turned up at the Owens Group annual meeting last week to quiz Mainfreight on its plans for Owens.

Little said it was normal commercial practice to ask questions about an investment. Toll had not been consulted as a shareholder about anything Mainfreight had done to Owens.

"The proceeds are sloshing around and they can't tell us what they are going to do with them or if there are going to be any more asset sales," he said.

Commenting on the conflict, an analyst said two successful and strong-minded businessmen were "leading with their chins".

Globally, the trend in transport industries was to rationalise fragmented sectors and get efficiencies from better technology. This would happen in NZ.

- STAFF REPORTER