<p>Toll holdings has scrapped its current bid for Tranz Rail in favour of a yet another offer on the back of a surprise deal with the New Zealand Government.</p> <p>The government and Toll stunned the markets and Tranz Rail itself with news that they had cut a deal over the track and company ownership arrangements.</p> <p>If Toll’s eventual bid is successful, it will sell the track network to the New Zealand Government for NZ$1 and the government has agreed to spend NZ$200m upgrading rail infrastructure and replacement capital.</p> <p>In turn Toll has agreed to invest NZ$100m in rolling stock and locomotives, and will receive incentive to increase freight volumes.</p> <p>The government will drop its previous plans for a 35% stake in Tranz Rail.</p> <p>New Zealand’s takeovers panel has granted Toll permission to withdraw its current offer.</p> <p>The new offer will be conditional on gaining 90% shareholder approval – a significant change on the majority shareholder requirement on the old offer.</p> <p>Toll’s managing director, Paul Little, said the new agreement fulfilled both government policy objectives and the company’s commercial requirements.</p> <p>"While Toll has always been committed to owning and operating Tranz Rail, it had consistently maintained an open mind on government ownership of the rail asset," Mr Little said.</p> <p>Tranz Rail said it was "surprised" by the terms on the new joint agreement and would make no further comment until the announcement had been evaluated.</p> <p>The share market in Australia responded favourably to the news yesterday (Monday, July 7) driving Toll’s share price up nine cents to close at $7.39.</p> <p>In New Zealand this morning (Tuesday, July 8) Tranz Rail shares were trading at a steady NZ94 cent, just one cent below the Toll offer price.</p> <br />
