Toll adds a month to rail takeover timetable

By PAM GRAHAM

Toll Holdings has given itself another month to win over shareholders opposed to its all-or-nothing bid for Tranz Rail.

The Australian company also said yesterday that it was pursuing the idea of listing its shares in NZ, was in talks with Tranz Rail and had had discussions with Mainfreight about its approach to rail.

Toll's 95c a share bid has been found wanting by independent valuer Grant Samuel and the Tranz Rail board, and dismissed as doomed by institutional shareholders, mostly because it does not pass on the value of Toll's track buyback deal with the Government. That deal is exclusive as long as Toll's bid is live, but available to others if Toll fails.

"I think over the next couple of weeks if there is not another bid on the table then the clear option will be there," said managing director Paul Little. "You either accept 95c from Toll, or whatever else comes along - which may be nothing."

Toll yesterday extended its offer to September 26 from August 29, and Little said he was "inclined to think there won't be another extension". Under takeover rules, bids can be extended by up to 90 days.

Tranz Rail shares closed at 99c yesterday and have fallen from $1.02 two weeks ago, indicating traders are unsure if there will be a rival bid from US company Genesee & Wyoming or others.

Little said Toll was in discussions with Tranz Rail on a range of matters. He said Toll was looking for a statement from the board about its bid in the absence of other offers.

It was also investigating the idea of listing its shares in New Zealand. Some shareholders want to ride with Toll as a 50 per cent owner of Tranz Rail, but Toll wants total control. "Dual-listing is one way that we can offer New Zealanders some exposure to the upside," said Little.

Talks with competitor Mainfreight last week were to address concerns about a competitor operating rail. "We won't be doing anything other than trying to provide them with a rail capability to run their business," Little said. Mainfreight is a heavy rail user and competes with Toll.

Mainfreight managing director Don Braid said the talks were interesting and meaningful but the company still had concerns.

Mainfreight has given notice of a bid for rival Owens Group in what is seen as another component of a consolidation under way in the sector.

Little said he understood the sensitivities to Australian companies buying New Zealand firms.

"This is very much about building a good railroad for New Zealand and a logistics outcome for New Zealand. If we succeed in doing that for Toll shareholders then it will be good for New Zealanders generally."

Toll presents its annual accounts on September 4 and is not expected to detail its NZ strategy. Tranz Rail has to release its audited full-year accounts by August 29.