Toll poker faced on its Tranz Rail intentions

<p>Toll Holdings will take a closer look at Rail America’s bid for Tranz Rail before revealing the extent of its own plans concerning the New Zealand operator.</p> <p>"I think we need to understand what the current bid from Rail America entails and we need to know the conditions bound within that bid," Toll’s managing director Paul Little said this morning (Wednesday, May 21).</p> <p>"We want to see how it unfolds."</p> <p>The Rail America bid could come unstuck on a number of conditions, which include getting 90% of the shares. </p> <p>Mr Little said Toll’s announcement this week of a 6.1% stake in Tranz Rail indicated it is interested in the company.</p> <p>"We have flagged an interest in their assets and we have flagged our interest in being part of this process," he said.</p> <p>"What we are not flagging is how we are going to go about it."</p> <p>Toll is already involved in a due diligence process with Tranz Rail concerning the sale of its trucking asset, Tranz Link.</p> <p>Analysts in the Australian and New Zealand media have speculated that Rail America’s bid &#8211 which encompasses all of Tranz Rail’s assets &#8211 may have forced Toll’s hand.</p> <p>Mr Little said that although the timing of the Rail America’s bid might have been unexpected, the American operator’s interest in Tranz Rail came as no surprise.</p> <p>"They buy and sell rail assets around the world and they actually competed with Pacific National for the assets here in Australia," he said.</p> <p>Rail America has "indicated an appetite" for expanding its business in this region, he said.</p> <p>Mr Little said he expects the due diligence process concerning Tranz Link to be concluded within a couple of weeks.</p> <p>Tranz Rail has already said it will continue with its scheduled sale of assets to improve liquidity, despite the Rail America bid.</p> <p>Toll has indicated it is interested in buying more Tranz Rail shares at a reasonable price.</p> <p>Were the company to purchase another 4% of Tranz Rail shares, it would be in a position to scupper Rail America’s bid, a scenario to which Mr Little responded: "That’s right, but I think there is a general acceptance of our interest in being involved now."</p> <br />