Offer of 50 per cent more than yesterday’s share price should please shareholders
Toll Holdings, Australia’s biggest transport and logistics enterprise, seems destined to become a Japanese-owned enterprise.
Toll’s board is advocating shareholders accept a $9.04 per share cash offering, representing a 49 per cent premium to yesterday’s closing price and a 53 per cent premium to the three month volume weighted average price of Toll shares.
The offer values Toll at $8 billion, giving it a market capitalisation of $6.5 billion
If it gets past shareholders, Treasurer Joe Hockey and legal issues, the deal will leave Linfox as the biggest Australian-owned international freight transport operator.
Japan Post, which reported annual revenues of $163 billion last financial year compared with Toll’s $8.8 billion, proposes to use its new Toll division to “spearhead” its international expansion on the back of Toll’s Asia-Pacific presence.
“We believe the combination of Japan Post and Toll will be a transformational transaction for both our companies and we are very pleased we have been able to reach agreement,” Japan Post president and CEO Toru Takahashi says.
“In partnership with Toll we are starting a new chapter of looking outward and becoming a leading global player.”
Toll chairman Ray Horsburgh also emphasised the strength a Toll-boosted Japan Post will bring to bear.
“Japan Post is one of the world’s leading postal and logistics companies and Toll is the largest independent logistics group in the Asia Pacific,” Horsburgh says.
“Together, this will be a very powerful combination and one of the world’s top five logistics companies.”
The Transport Workers Union (TWU) called on Toll to give job security undertakings for the company’s 40,000 workers.
“Workers at Toll have worked hard to help build a profitable and successful business,” assistant national secretary Michael Kaine says.
“We expect that management will honour that loyalty and hard work by assuring staff that their jobs are safe in this takeover.
“We are urgently seeking a meeting with management to discuss the terms and conditions of this takeover and what the implication of it are for our 9,000 members at Toll.
“We want to assure our members we will be fighting to ensure their jobs and conditions will be safe.”
Toll’s branding and management will stay in place and its CEO will henceforth report to Japan Post.
“We will be complementary to Japan Post, and closely aligned in our target markets,” Toll CEO Brian Kruger says.
“Combined we will have an expansive geographical footprint with Toll providing expertise in the global logistics and transport markets.
“Japan Post will bring extra capability, financial strength and significant scale to accelerate growth.
“Together we will offer an enhanced value proposition while delivering innovative, efficient and cost effective solutions to our customers.”
Takahashi and Horsburgh were conciliatory in statements in a media conference.
“We would ask that all Toll employees stay with the business,” Takahashi says.