TOL is making a run, bargain hunters are starting to wake up and smell the cheese. Regardless of what happens with Patrick at this price, security, dividends and EPS TOL is a bargain. (heard a rumour that Fed Ex is about to move in - makes good strategic sense to set up Australian shop practically already done for them)
Why would you avoid a blue chip stock that has either a great strategic takeover on the cards or as an alternative if this fails great management track record, great business and with a huge surplus of cash = very strategic position and massive dividend payout or share buy back coming our way.... TOL has lots of alternative options available to it if PRK bid fails, and heaps of cash. And we are forgetting current business, very successful bringing in almost its entire capital value in revenue each year. Every second truck or van you see on the street these days is TOL - they are very successful. By all means, avoid, avoid, avoid so I can Buy Buy Buy some more cheap and own a solid business, with solid returns and a great market position with massive expanability if not locally then abroad. Expandability limit? look at the capital value of Fed Ex. - a long way to the top if you got some stock in TOL - great! good thing im buying now then.
... so far up more than 5% since i said its about to go for a run earlier this week (see below). People are starting to realise the 'over reaction' with TOL and are now moving in for the good buy. Over reaction is a well documented and common event on the market. As the AFR (9/2/2006) put it "its become fashionable to bag Toll Holding's", these same fair weathered fiends are now snapping up the stock. Today the ACCC commenced legal proceedings. Good. The issue will get resolved, Toll will make an excellent acquistion, or it wont and get back to good business anyway (where its stock was trading between $13-$14 prior to the PRK takeover announcement), and everyone will move on. What will happen to the share price then? stay under valued and down due to over reaction? time will move on as will people and business. Stock will recover back to what it is worth (and a hell of a lot more if it is successful with the bid). Toll are not silly either. The decision to continue with the takeover and allow the ACCC to initiate proceedings is not because they feel like a fight. I get the sense that there is rhyme and reason behind it. Strategy.
Interesting point made in AFR today, basically points out that TOL being repsondent in the trial means that it has the strategic advantage of not having to prove its case. Instead the ACCC will have the onus of proving TOLs bid is uncompetetive. The ACCC case is weak, and TOL know it, they originally had no issues with factors of the takeover bid concerning integrated logistics, but are now backflipping and saying they do. It has become personal just as much for the ACCC to prove a point and its getting silly. Any decent judge will see this backflip for what it is, mustering up anything they can now to oppose TOL, as they do not have much substantial after TOLs original concessions. There ia a lot of paying out TOL and Little (and as the AFR said it is becoming fashionable) but Corrigan is just as much a player. Little is the smart one, the quiet achiever. The not so smart one is the one who grasps for power and notoriety, we've seen this before of Corrigan and we are seeing it again now. The quiet achiever is just that, an achiever, dont be fooled he is a veryt smart cookie and the only reason Corrigan is kicking and screaming like a ..... is becasue he knows it and he is feeling that his empire is getting threatened - why is he feeling this? because it is. If there was no threat then this wouldnt be happening. The takeover for Corrigan is very real indeed and he knows it. He can scream, pretend to takeover Linfox, whatever but we must look deaper into why this might all be happening. Little and TOL are switched on, and if you look at the history and the other key players in their camp, Clayton Utz for example, they aint continuing this because they are stupid. My money (literally) is on Little not Corrigan. Like I said a few days ago, the tide is changing and im not the only one who thinks this way, hence the share price movement this week. The mood is now changing from 'theyve botched it' to 'looks like they might do it'. AND like I keep saying, in differencing of opinion to ODYSSEUS, if they dont get their with the PRK takeover they are still in a very strategic position and have a great business, and there might be some cash cow dividends coming our way - thats the beauty of TOL, not only have they been able to deliver strong organic growth, but have such a solid business that they can pump out big DPS instead. I think it was AFR that said even without PRK TOL will still be delivering 10%+ growth and this is through Synergies. I have done a comprehesive analysis of TOL from a fiscal, historical and strategic point of view and it all looks good, PRK is just a bonus that looks like it may come to fruition.
Interesting point made in AFR today, basically points out that TOL being repsondent in the trial means that it has the strategic advantage of not having to prove its case. Instead the ACCC will have the onus of proving TOLs bid is uncompetetive. The ACCC case is weak, and TOL know it, they originally had no issues with factors of the takeover bid concerning integrated logistics, but are now backflipping and saying they do. It has become personal just as much for the ACCC to prove a point and its getting silly. Any decent judge will see this backflip for what it is, mustering up anything they can now to oppose TOL, as they do not have much substantial after TOLs original concessions. There ia a lot of paying out TOL and Little (and as the AFR said it is becoming fashionable) but Corrigan is just as much a player. Little is the smart one, the quiet achiever. The not so smart one is the one who grasps for power and notoriety, we've seen this before of Corrigan and we are seeing it again now. The quiet achiever is just that, an achiever, dont be fooled he is a veryt smart cookie and the only reason Corrigan is kicking and screaming like a ..... is becasue he knows it and he is feeling that his empire is getting threatened - why is he feeling this? because it is. If there was no threat then this wouldnt be happening. The takeover for Corrigan is very real indeed and he knows it. He can scream, pretend to takeover Linfox, whatever but we must look deaper into why this might all be happening. Little and TOL are switched on, and if you look at the history and the other key players in their camp, Clayton Utz for example, they aint continuing this because they are stupid. My money (literally) is on Little not Corrigan. Like I said a few days ago, the tide is changing and im not the only one who thinks this way, hence the share price movement this week. The mood is now changing from 'theyve botched it' to 'looks like they might do it'. AND like I keep saying, in differencing of opinion to ODYSSEUS, if they dont get their with the PRK takeover they are still in a very strategic position and have a great business, and there might be some cash cow dividends coming our way - thats the beauty of TOL, not only have they been able to deliver strong organic growth, but have such a solid business that they can pump out big DPS instead. I think it was AFR that said even without PRK TOL will still be delivering 10%+ growth and this is through Synergies. I have done a comprehesive analysis of TOL from a fiscal, historical and strategic point of view and it all looks good, PRK is just a bonus that looks like it may come to fruition.
Found this on one of the other threads: Toll might pursue P&O instead By Philip Hopkins SMH November 3, 2005
Toll Holdings has flagged that it may buy the stevedoring assets of P&O Ports in Australia if it fails in its $4.6 billion bid for Patrick Corporation.
Toll managing director Paul Little disclosed this yesterday when discussing the reported interest by the government of Dubai, through Dubai Ports World, in buying P&O's worldwide operations.
The Danish shipping line AP Moeller, the biggest shipping operator in the world, has also been reported to be interested in P&O.
Mr Little said Toll would be keen to talk to both groups to see whether they wanted to keep P&O's Australian assets in their world portfolios. The Australian assets may not be central to their future growth plans.
"We have said Patrick's are the assets we would prefer to have. But if Patrick's assets are not available, we would look closely at P&O," he said.
Mr Little acknowledged that Toll had previously approached P&O to buy its Australian operations but "they were not keen".
"Under a sale process, we need to revise that now," he said. But the news about other parties' interest in P&O only became known on the weekend, so Toll had had no time to do any work on it.
Mr Little said the move on P&O confirmed the philosophy behind Toll's bid for Patrick: the rationalisation of the global logistics industry.
A takeover by Toll of Patrick would increase efficiency and be good for customers, particularly in and out of Asia, he said.
Mr Little's comments came as he issued Toll's supplementary bidder's statement in reply to Patrick's target's statement, and announced that the offer had been extended to December 2.
Mr Little said that by November 14, the Australian Competition and Consumer Commission would publish its phase one findings which would summarise the sensitive issues involved in a possible takeover.
These potentially were rail and coastal shipping. "We will address them as we go," he said.
Mr Little said the deficiencies in the Patrick target's statement reinforced the merits of Toll's takeover bid. These included:
�¡ Patrick has effectively endorsed the logic of Toll's bid by its plans to expand in freight forwarding and express freight but has no strategy to bring it about.
�¡ Despite two years of profit forecasts, Patrick has not provided any information on its current gearing and forecast cash flows.
�¡ Patrick's financial forecasts rely on the successful Pacific National joint venture continuing in its present form.
Mr Little said Patrick's port division was valued at 25 times 2005 earnings, which was 90 per cent above the average of recent port company transactions.
The multiple being offered for P&O was about 13 times earnings, while Toll's implied multiple was about 19. "The value we have placed on Patrick's ports assets means �c we are paying a very full price," he said.
Mr Little reiterated that Toll had ruled out raising its price for Patrick. Toll's share price had been hit by concerns about the ACCC and the possible breaking-up of PN.
"Once Toll's share price is normalised, we will have a better view of the value of the Toll bid," he said.
Exactly one week ago I called that TOL is making a run, and that it has.
The market has changed its tune since it became fashionable to bag TOLs takeover bid causing an over reaction, and now looks to be betting that TOL has a good chance of succeeding the PRK bid.
Little stayed cool knowing what his cards were regardless of media and public hype and its now looking more and more likely that hes much more in tune with the situation than everyone thought.
The smart investors are eating their humble pie and pride and starting to get back in (hence the movement over the last week). Alas there are still those who are hanging onto the 'fashion' at their own and their investors expense.
TOL has another dollar to go yet before it settles in the $12.50 to $13 range awaiting the rersults of proceedings, which it seems that it may win, which will send the share price north of $15.
TOL Price at posting:
0.0¢ Sentiment: ST Buy Disclosure: Not Held
