Costa bid for Mannway 'but price too low'

<font color=red><b>MANNWAY FALLOUT:</b></font> Costa wanted Mannway; more details emerge of failed negotiations to save the transport giant

Costa bid for Mannway 'but price too low'
Costa bid for Mannway 'but price too low'
By Brad Gardner and Samantha Freestone | December 10, 2009

Family-owned business Costa Logistics had offered a deal to buy Mannway, as details emerge of how negotiations to save the company broke down.

ATN understands a deal to sell the company fell through after a bid made by Costa was rejected over concerns it undervalued Mannway.

New Costa CEO Tim Bolam says the business was interested at one stage as rumours circulated of a possible sale. He declined to comment further."Yes we were involved in the process. We were interested in Mannway," Bolam says.

Although a bid was offered, Brendan Richards from the Ferrier Hodgson firm says a deposit was never made.

Richards declined to comment further, but ATN understands negotiations also broke down because Costa could not meet the timeframe demanded by the receivers.

But a fuming Mannway employee, who faces a bleak Christmas after the company closes its doors next week, has blamed GE Finance for scuppering efforts to keep the company going.

"We have all worked so hard to keep the company running and to make it viable to be sold and only to find out that GE pulled the rug out from under the sale of Mannway because they didn’t want to wait," Paul Defty says.

Defty is a supervisor and one of 300 employees who will be forced to look for new work after Mannway stops trading on December 18.

A Mannway sub-contractor based in Newcastle who declined to be named has accused the receivers of misleading employees by telling them a deal would be done.

"We are under the impression the receivers have lied to us," the truck driver says.

But Richards has dismissed claims there was ever talk of a done deal.

"I have no idea what has been driving this view that a deal has been done," he says.

"We have been working like mad up until Tuesday night to get a deal across the line."

Attention will now turn to auctioning Mannway’s assets, which include some 600 vehicles, 10 warehouses and 100,000 square metres of customer storage.

Richards says receivers have no intention of flooding the market, adding that the sale may take time to ensure there is a maximum return on assets.

"It will be a staged process over time," he says.

"We’re not about having a massive fire-sale of assets."

Mannway was founded in 1979 by Bill Mann and was operated by former Linfox executive Stuart Brown.

What does the future hold for Mannway employees, and how did the sale process fall through? See the January edition of ATN magazine for the full story of the Mannway fallout.

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