Patrick rejects Toll offer, and heads for court over Toll’s promises to the ACCC

<p>Patrick’s board has this morning (Monday, March 27) formally rejected Toll’s latest bid, saying that its terminals are on track for significant forecast earnings growth, the airline business has improved significantly, and its shares have "consistently traded at a substantial premium to Toll’s most recent offer". </p> <p>Patrick has also launched a court action today to block Toll from carrying out its undertakings to the Australian Competition and Consumer Commission on the sale of assets which come under the pair’s joint venture contract in Pacific National. </p> <p>Patrick is also to update the independent expert valuation of its shares by Lonergan Edwards. </p> <p>"Based on this offer, Patrick shareholders are better off without Toll in the medium- and long-term future," Patrick managing director Chris Corrigan said. </p> <p>"Everything we have learned about Toll in the past seven months has confirmed our belief that Toll has lower quality assets and a higher risk earnings profile." </p> <p>Patrick said that the drop in Toll’s share price to below $11 in the wake of the ACCC’s initial rejection of its bid "confirms the board’s concerns about the sustainability of Toll’s current trading multiple".</p> <p>The company also said that SemLog’s business was based primarily on intra-Asian joint ventures with "no strategic linkage to the rest of Toll’s Australian business and are of questionable quality". </p> <p>The Patrick board said that apart from undervaluing Patrick, Toll was not dealing transparently with Patrick shareholders on the future ownership and structure of Pacific National and Virgin Blue, and what deals that Toll might have done over these assets. </p> <p>Patrick said that it was "improper and illegal for Toll to commit to dealing with Patrick’s assets for the benefit of Toll and the detriment of Patrick and its shareholders". </p> <p>It said that there was no indication on whether the idemnities being offered to minority shareholders "are adequate or enforceable </p> <p>"Clearly no idemnities would be needed if the actions were unquestionably legal and undamaging," the board said.</p> <br />