Tranz Rail shares hit year high ahead of Toll bid's close

1.00pm

Shares in Tranz Rail shot up to their highest level in a year today -- the last day of Australia's Toll Holdings extended takeover offer for the rail operator.

By 11.30am, Tranz Rail shares were up 9c to 142, their highest since early November last year.

Toll appears unlikely to achieve its target of 90 per cent control of Tranz Rail with its $1.10 a share offer whereby it could secure compulsory acquisition of minorities.

Amro Craigs Equities broker Nigel Scott told NZPA today's rise may have been down to expectations of a new higher bid from Toll.

"The market is speculating on the potential that the bid lapses for another one to replace it and take it from there."

"The market speculation's been the whole way through that one of Toll's options would be to immediately rebid at a price that's appropriate to get to the 90 per cent level."

However Mr Scott said Toll might just leave things as they are and run the company with minority shareholders in tow, much as freight company Mainfreight is presently doing after its full takeover of Owens Group was stymied by Toll's last minute acquisition of a 12 per cent blocking stake in Owens.

- NZPA