Toll gives undertakings on Patrick takeover bid

MELBOURNE - Transport group Toll Holdings Ltd has offered to sell some Bass Strait ships and its interest in an auto logistics business as it tries to secure approval from the competition watchdog for its A$4.6 billion ($4.9 billion) takeover bid for stevedore Patrick Corp Ltd.

Toll has also given some undertakings to the Australian Competition and Consumer Commission (ACCC) concerning rail operations.

"The undertakings which are proposed are strategic," Toll said in a statement.

"They are not, however, material in the context of the forecast financial performance of the merged group."

Toll said it had offered the Australian Competition and Consumer Commission (ACCC) undertakings that were specifically targeted at concerns raised by the ACCC in its statement of issues of November 10, 2005.

The undertakings included selling two ships used by Patrick on the Bass Strait route and berthing rights at Webb Dock East in Melbourne and Burnie in Tasmania.

Toll has also offered to sell its interest in PrixCar.

In addition, Toll gave undertakings concerning the east-west rail corridor which it said were designed to facilitate train operations by competitors.

Toll said it would lease six locomotives to Chicago Freight Car Leasing Company so that it could lease those locomotives to other operators for use on the east-west rail corridor.

Toll would also permit the Australian Rail Track Corporation to adjust train paths to facilitate access by another operator.

Toll did not offer any specific undertakings for terminals because it said there was adequate terminal space currently available for competitive train operations in Perth, Adelaide and Melbourne.

Toll believed that the companies most likely to expand on the east-west rail corridor were SCT Logistics, Queensland Rail and Australian Rail Group.

Adelaide and Melbourne had substantial, independently-operated third party terminals suitable for running east-west trains, according to Toll.

Toll said the east-west rail corridor undertakings addressed a key concern of the ACCC.

"Toll believes that after the merger, even without any undertakings, Pacific National and Toll would not have been able to disadvantage other freight forwarders," Toll said.

Pacific National is a rail operator jointly held by Toll and Patrick.

Toll said it had put forward the undertakings to the ACCC to alleviate any possible concerns and because it was in everyone's interests for Toll's offer to progress quickly.

Toll shares were 10 cents higher at A$13.70 at 1048 AEDT (1248 NZT) today. Patrick was seven cents lower at A$7.28.

- AAP