<p>Toll Holdings bid for New Zealand rail transport group Tranz Rail is proving to be trickier than first thought, the <em>Australian Financial Review</em> warned today (Monday, June 30).</p> <p>Toll has already scared off a rival bid from Rail America, and now faces competition from a proposed rescue package from the New Zealand Government.</p> <p>Tranz Rail’s profit forecasts and share price have fallen steadily over the past year, and its rolling stock and infrastructure assets are deteriorating.</p> <p>The New Zealand Government proposal would involve an immediate investment of $NZ44m ($38.5m) to keep the company out of receivership.</p> <p>This would be the first step in a NZ$287m plan that would end with the NZ Government owning Tranz Rail’s network and a 35% share in the company.</p> <p>Toll has stepped up its campaign in the face of such competition, raising its share offer from NZ75 cents to NZ95 cents a share, with some analysts now questioning the value of the takeover.</p> <p>Toll’s share price has dropped 3 cents to $7.25 since Friday, but investors have generally supported the bid with Toll’s share value up since the bid was announced in late May.</p> <p>The situation will come to a head over the next two months, with Toll’s bid expected to close within a month, and a Tranz Rail shareholder vote on the government proposal set for August 8.</p> <br />
