tol is confident Toll waves away ports war
By Blair Speedy
16-01-2006
From: The Australian
TOLL Holdings appears increasingly confident of receiving regulatory approval for its proposed takeover of Patrick Corp, passing up the opportunity to canvass a "plan B" option to buy P&O's Australian ports business.
Toll Holdings chief executive Paul Little said his company hadn't spoken to Singapore's PSA International over the possibility of buying P&O's Australian operations if PSA succeeded in acquiring the global ports group over rival bidder Dubai Ports.
Mr Little said that while he had spoken to Dubai Ports about the prospect of buying the assets following its £3.3 billion ($7.8 billion) offer to acquire P&O, he hadn't yet been in contact with PSA International, which has flagged a higher offer for P&O of £3.5 billion.
"We signalled our interest a month ago with DP, but we thought we'd wait and see how it's played out," he said yesterday.
This was despite reports that PSA - owned by the Singapore Government's investment vehicle Temasek Holdings, had already been soliciting interest from potential buyers for a possible post-acquisition break-up of P&O's port assets. Temasek's $80 billion-plus investment portfolio already includes a number of Australian assets, including telco Optus via its subsidiary Singapore Telecommunications.
Temasek also owns a stake in Qantas, with which it is both a co-investor in Singapore-based Jetstar Asia and a fierce competitor through its control of Singapore Airlines, which is agitating for access to Qantas's key international routes.
Mr Little's lack of concern over P&O suggests he is confident the Australian Competition & Consumer Commission will approve Toll's hostile bid for Patrick, on which a decision is expected as early as this week following an ACCC board meeting scheduled for Wednesday.
Mr Little said a sale and break-up of P&O, which shares the Australian container stevedoring market in roughly equal proportion with Patrick, would not have any impact on Toll's plans for Patrick's port business if the Toll-Patrick merger was successful.
"The P&O ports business in Australia is a very good asset, but we wouldn't be intimidated by a new owner," he said.
He also doubted that the loser in the battle for P&O could then make a rival offer for Patrick.
"Patrick is a far more diverse collection of assets, not a pure ports play, and if anyone was going to express an interest they would have done it by now," he said.
Mr Little left open the prospect of raising the consideration on offer for Patrick, which currently stands at 0.4 Toll shares, 0.3 of Patrick's own Virgin Blue shares and 43c in cash for each share in Patrick.
"I'll probably go into that after the ACCC announcement," Mr Little said.
The bid first contained a 75c cash component but was automatically reduced by 32c in November in line with a special dividend by Patrick.
My comments:
Any other bidder is likely to wait for the ACCC decision to see whether TOL is still in the game.
There is no point in bidding against TOL if there is no need to.
PRK
patrick corporation limited
