Macquarie plans to fight Toll for Patrick
Macquarie Bank Ltd. could throw a wrench in Melbourne, Australia-based Toll Holding’s plans to become one of the world’s leading logistics providers, after confirming today it is establishing a consortium of investors and lenders to trump Toll’s agreed A$5.81 billion ($4.47 billion) offer for Australian ports and airport operator Patrick Corp.
Patrick is Australia’s largest terminal operator and stevedore, and provides freight forwarding, customs brokerage and other services for importers and exporters. It also provides passenger and cargo ground handling at Australian airports, as well as road feeder services, and has majority control of Virgin Blue, the low-cost Australian airline started in cooperation with Virgin Atlantic founder Sir Richard Branson.
“At this stage, final commitments from all parties to the potential transaction have not been received. Any offer by the consortium will be contingent upon receiving these commitments, as well as a recommendation from the board of Patrick. As a result, there is no certainty that any such offer will proceed,” Macquarie said in a statement.
Patrick’s board finally agreed last month, after eight quarrelsome months, to Toll’s hostile takeover bid when Toll raised its cash and stock offer. Toll’s offer for the company is valued at A$9.20 ($7.08) per share with Patrick shareholders receiving A$3 ($2.31) cash, plus 0.4 Toll shares for each Patrick share held.
To mollify Australian competition authorities, Toll agreed to sell its half of the Pacific National freight railway which it co-owns with Patrick.
“Toll notes the announcement by Macquarie Bank this morning regarding Patrick and market speculation that it might seek to lead a highly leveraged bid for Patrick. Toll will only comment on such a proposal if any such proposal materializes,” said Toll in response.
Toll’s offer is scheduled to close May 12. At close of business Thursday, Toll said it had a relevant interest in 11.19 percent of Patrick shares and acceptance instructions for a further 9.38 percent.
On Wednesday, Toll said it has more than 90 percent acceptances for its A$1.1 billion ($846 million) takeover of Singapore-based logistics giant SembLog, the second part of its strategy to join the likes of UPS, FedEx, TNT and Deutsche Post’s DHL in the upper echelon of integrated logistics providers.
Patrick’s shares rose 3.22 percent on the Australian Stock Exchange to close today at A$8.98 ($6.91). Toll’s shares dived 4.87 percent to close at A$13.10 ($10.08).