Toll snares 12 per cent of Owens group

11.45am

UPDATE - Australia's Toll Holdings announced this morning it had acquired a 12 per cent stake in Owens Group, the bulk freight company currently subject to a takeover offer from Mainfreight.

Toll said it had acquired 6.7 million Owens Group shares representing approximately 12 per cent of the company for A$6.7 million ($7.78 million).

"The acquisition of this stake in Owens is in line with Toll's strategic direction to build its integrated transport capability across all major sectors," Toll said in a statement to the New Zealand Exchange (NZX).

"Toll believe this investment will maximise its position with key transport and logistics assets in Australia and New Zealand," the company said.

AMP Henderson chief investment officer Paul Dyer today confirmed his company had sold its holding in Owens Group to Toll.

Mainfreight which has a 66.56 stake in Owens Group currently has an offer on the table of $1.10 per share in a bid to win 90 per cent of the company. The offer closes tomorrow.

The price Toll paid today amounts to $1.16 per share.

Last week AMP Henderson said it would not stop Mainfreight from getting to its desired 90 per cent level if it was likely to achieve it.

Today Mr Dyer told NZPA: "Mainfreight's bid was conditional on getting 90 per cent, unless Toll were to sell to them which would seem unlikely they're not going to get 90 per cent. It will be interesting to see how the bid develops".

Toll, whose own takeover bid for Tranz Rail fell short of its desired 90 per cent holding, securing 85 per cent, denied today's acquisition was a blocking move against Mainfreight.

"Quite the opposite", Toll Holdings managing director Paul Little told NZPA.

"It's a recognition that the inevitable rationalisation and consolidation of the industry in New Zealand is moving ahead with pace.

"We're very interested in being more vitally involved in that process. A lot of synergies exist between Tranz Rail and its interface with Owens and Mainfreight. We're keen to explore those in more detail.

"We'll be talking to Mainfreight and Owens about that over the next couple of days.

"Just because you compete with someone doesn't mean you can't work with them, and I think that's the maturity that we see coming in to the transport logistics sector that we want to be part of."

Mr Little said Toll had no plans at present to either extend or on-sell its holding in Owens, "We're not doing this as a favour to Mainfreight", he said.

He denied that Toll's expansion and the consolidation presently occurring in New Zealand's freight and logistics sector would result in a lessening of competition.

"It's not my view. If you accept the premise that the New Zealand market is valued at $6 billion, maybe a bit more, Toll on the back of its acquisition of Tranz Rail and its existing businesses are going to be probably less than 10 per cent of that total market. So I think on anyone's view there is still room for a lot of consolidation before you have a lessening of competition. "

- NZPA