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New Zealand track buy back okay with Toll

<p>The New Zealand Government has offered to buy back the national rail network from Tranz Rail as part of a rail development deal.</p> <p>The surprise offer made on Friday (June 6) is conditional to approval by Tranz Rail’s shareholders, who also have a takeover bid from Toll Holdings to contemplate.</p> <p>Tranz Rail and the New Zealand Government signed heads of agreement on a joint plan for restructuring and developing the railway system.</p> <p>Under the deal, the government would pay about NZ$75.8m for a 35% interest in Tranz Rail and would buy back the rail track, associated land lease, yards, terminals and control systems for NZ$1 and other land an surplus assets for about NZ$50m.</p> <p>Tranz Rail directors have already recommended the deal to its shareholders.</p> <p>Although the deal represents a significant asset sale, Toll Holdings managing director Paul Little said on Friday it would not make a lot of difference to Toll’s NZ75 cent a share takeover offer.</p> <p>"Our bid still represents better value and a more certain outcome for shareholders and customers," Mr Little said.</p> <p>"The reality is that the only asset being prepared to be sold is the network and we have always had a very open mind on track ownership.</p> <p>"If that is the only asset sale proposed then we are comfortable with that, we are more interested in the issue of access"</p> <p>Toll is happy to work with the New Zealand Government, if it took over as track owners, he said.</p> <p>Mr Little said the deal had come as a surprise but it did not greatly affect Toll’s bid.</p> <p>"It’s the company’s (Tranz Rail’s) prerogative to generate whatever outcome they feel is best for shareholders, but we still feel that we offer the best alternative," he said. </p> <br />