RailAmerica calls off Tranz Rail takeover bid

<p>RailAmerica has dropped plans for a takeover bid of cash-strapped New Zealand operator Tranz Rail.</p> <p>The company made the surprise decision late yesterday (Thursday, May 22) just a week after its equally unexpected announcement of its intention to offer NZ75 cents a share for Tranz Rail.</p> <p>RailAmerica CEO Gary Marino said the decision followed its due diligence investigation.</p> <p>"We have determined that, under current circumstances, the proposed acquisition does not represent the opportunity for enhanced shareholder value that we had originally contemplated," Mr Marino said.</p> <p>Tranz Rail’s share price had soared above NZ80 cents last week on news of the possible takeover and the rise was bolstered further when Australia’s Toll Group entered the fray, acquiring 6.1% of Tranz Rail shares.</p> <p>Tranz Rail board chairman Wayne Walden said RailAmerica’s withdrawal was disappointing as it represented a potential option for shareholders, but said the bid was "always highly conditional". </p> <p>"The withdrawal is not surprising given the rise in Tranz Rail’s share price," he said.</p> <p>"The bid did not look likely to succeed at the price indicated."</p> <p>News of the withdrawal has hit Tranz Rail shares hard, dropping to as low as NZ64 cents before firming to NZ75 cents at noon (AEST) today </p> <p>Although RailAmerica has not ruled out interest in the future, much will now depend on the level of Toll Holding’s intentions for the New Zealand operator.</p> <p>Earlier this week Toll indicated it is interested in the wider assets of Tranz Rail, beyond the present due diligence process it is undertaking for the Tranz Link trucking business. </p> <br />