Toll calls revised offer for Tranz Rail "full and fair"

By MELANIE CARROLL

Australian transport and distribution company Toll Holdings said increasing its offer for Tranz Rail by 20c per share made it a "very fair and full bid".

Toll's increased offer this afternoon for Tranz Rail, from 75cps to 95cps, valued Tranz Rail at $200 million.

Tranz Rail shares closed at 89c today, down 3c.

The bid is in conflict with the Government's $226 million bailout package, which includes the Government taking a 35 per cent stake through the issue of 113 million new shares in Tranz Rail at 67c a share.

Shareholders are due to vote on the bailout, in which the Government would buy the track and associated assets for $50 million, on July 11.

Mr Little told NZPA that Toll's revised offer was "a very fair and full bid".

"On the back of having an opportunity to speak to the key stakeholders in the last couple of weeks and also having more information at our disposal, I think it should succeed.

"The benefits remain the same as they were, the conditions have changed to bring more certainty to the outcome, and the price has been increased."

Toll was "unlikely" to increase its offer again, but would still consider discussions with the Government if it failed.

"We'll continue to negotiate with the Government at this point in time and into the future, but those sorts of discussions with the Government haven't borne fruit.

"So we're less confident about being able to work with the Government, should the other proposal be voted in, than we are in being able to manage the company in our own right."

The company said yesterday it was a 50/50 call whether it would revise its bid.

"We've always been very anxious to try and gain control of the company, and improve it,"' Mr Little told NZPA today.

"We obviously needed to rework our financial models which we have done overnight -- we believe we can offer another 20c and it's a very fair offer now."

Mr Little confirmed that Melbourne-based Toll, which owns 10 per cent of Tranz Rail, would offer to sell Tranz Rail's tracks to the Government if its bid was successful.

Finance Minister Michael Cullen said in a statement today that the Government had no comment on Toll's revised bid.

Toll removed some conditions previously in its takeover notice, requiring Tranz Rail to confirm its third quarter and nine-month financial results to March 31 and provide confirmation profit and capital spending forecasts for 2003-2005.

"Our intention remains unchanged -- Toll is seeking to own and operate Tranz Rail on a long-term basis, whether that includes the tracks or not," Mr Little said.

Tranz Rail shareholders would receive the Toll offer within the next 14 days.

While Tranz Rail shares were trading around 30c prior to the first bid of 75cps, by RailAmerica in May, shareholders and analysts have said the cash-strapped rail operator is worth more than 75cps.

- NZPA