SYDNEY - Australian land transport group Toll Holdings Ltd. plans to combine the operations of stevedore Patrick Corp Ltd with Singapore-based SembLog logistics group, Toll's chief executive said on Sunday.
The plan was dependent on Toll winning its hostile takeover bid for Patrick, managing director Paul Little told the ABC's
Inside Business television programme.
Little said he still hoped to acquire 100 per cent of Patrick now that Australia's antitrust regulator had allowed it to proceed. But if Toll managed to build a 50.1 per cent stake it could take management control, he said.
"Our view is the 50.1 per cent hurdle, our first hurdle, will allow us to take control of the business. That will put pressure on other shareholders to sell," he said.
Earlier this month Toll paid up to $S1.4 billion to buy a 60 per cent stake in SembLog from SembCorp Industries , Southeast Asia's largest logistics firm. The Australian company is now bidding for the rest of the shares.
Asked what Toll would do if it gained control of Patrick, Little replied: "From an operational point of view clearly we now need to look at the ability to take the Patrick business (and) combine it with the newly-acquired SembLog business in Asia".
"That, in conjunction with Toll, would allow us to start marketing this cross-border international supply chain service that we think is a key feature of what we will end up with." Patrick, Australia's main ports operator, is fiercely resisting Toll's takeover bid. Patrick directors control around 10 per cent of the company's shares.
Little said Toll intended to "engage" with the Patrick directors to persuade them to recommend the takeover bid.
But he would not be drawn on whether Toll might increase its takeover terms for Patrick, simply describing the bid as "very fair and full".
Little reiterated that Toll had no interest in operating the Virgin Blue Holdings Ltd. passenger airline, which is 62.4 per cent owned by Patrick.
"The passenger airline business (is)...not a skill set of ours...there is no desire in the longer-term to hold that complete stake," he said.
"However, we remain quite ambitious to look at the possibility of our air freight moving through the Virgin system," he said.
- REUTERS
