AusRAIL, Market Sectors

Analysts downplay prospects for Asciano&amp&semicolan#47&semicolanToll takeover of Brambles

<p>With Brambles shares soaring 12.3% yesterday (Wednesday, August 8) on speculation of a takeover by Asciano or Toll or both, market analysts <em>Lloyd’s List DCN</em> spoke to discounted the option. </p> <p>One analyst, who asked not to be named, said he and his colleagues were &#8220scratching our heads&#8221 about how such a move could work and what the attraction was to Brambles’s two main businesses: pallet and container operation Chep and document services outfit Recall.</p> <p>He said that while Asciano managing director Mark Rowsthorn had expressed interest in Brambles in the past, at triple the size of Asciano, it would be a big bite to swallow for his fairly highly-geared firm, even with private-equity support. </p> <p>Shaw Stockbroking head of research Brent Mitchell, who has put the cost of such a takeover at about $20bn, said his advice was that there would be no takeover.</p> <p>Analyst sentiment was not uniform, however, with ABN Amro Asset Management’s Bruce Low telling financial newsagency Bloomberg: &#8220I certainly wouldn’t rule a bid out.</p> <p>&#8220There has been a lot of speculation over the years and there is an opportunity to create value in the business by gearing up the balance sheet,&#8221 he said.</p> <p>This position appeared to be bolstered somewhat by Toll managing director Paul Little not ruling anything out.</p> <p>&#8220The motivation was really to take advantage of the low stock price in areas which are very important to us,&#8221 Mr Little told newsagency Reuters. </p> <p>&#8220What we may or may not do in future, I am not ruling anything in or out.</p> <p>"It is not beyond the realms of possibility that someone makes a pitch for Brambles at some stage. </p> <p>&#8220We just felt we wanted to be closer to the action and having a small holding gave us that opportunity.&#8221 </p> <p>Mr Little made similar comments elsewhere yesterday.</p> <p>What both Toll and Asciano sought to avoid was any hint that they were working in tandem, given likely Australian Competition and Consumer Commission sensitivity.</p> <p>&#8220Further to the announcement by Asciano Group this morning in relation to its investment in Brambles Limited, Asciano would like to clarify that its presence as a shareholder was first notified to Brambles on Monday, 30 July, 2007,&#8221 Asciano said. </p> <p>&#8220Asciano’s position in the transport infrastructure and logistics sectors means that it has developed a strong understanding of Brambles assets over a long period of time. The recent weakness in the Brambles share price has provided the opportunity for Asciano to make this investment. </p> <p>&#8220As a shareholder, Asciano looks forward to having discussions with Brambles on ways to create value for all Brambles shareholders. </p> <p>&#8220Asciano would also like to confirm that it is not currently working with Toll Holdings in relation to Brambles and has no intention of doing so." </p> <p>Brambles said it was seeking to find out more from Toll.</p> <p>&#8220Since the announcement earlier today regarding Asciano Group’s relevant interest in Brambles’ shares, Brambles has received from Citigroup Global Markets Limited a response to a tracing notice issued by Brambles, confirming that a separate holding of 5,100,000 Brambles ordinary shares, registered in Citigroup’s name, belongs to Toll Holdings Limited,&#8221 the company said. </p> <p>&#8220Brambles has sought to ascertain Toll Holdings’s intentions with respect to Brambles. </p> <p>&#8220Toll Holdings has advised Brambles that it has no particular plan with respect to its Brambles shareholding but has declined to provide Brambles with any assurance as to its future intentions. </p> <p>&#8220Toll Holdings has also stated to Brambles that Asciano and Toll Holdings are not working together. </p> <p>&#8220Brambles will be seeking further information from Toll Holdings with respect to its relevant interest in Brambles shares.&#8221</p> <br />