Toll reduces cash offer and waits on the ACCC

<p>Toll Holdings could be set to make the cash component in its $4.6bn takeover bid for Patrick Corp even smaller. </p> <p>The company said yesterday (Thursday, November 24) that it would cut its offer in line with Patrick’s payout of a $220m special dividend to Patrick shareholders last week. </p> <p>"Toll’s current intention is that the reduction in its offer consideration will be applied through a 32 cent reduction in the cash consideration," the company said in a third supplementary bidder statement.</p> <p>Analysts said the already small cash component of 75 cents in an offer worth around $7 a share, would now drop to less than 50 cents.</p> <p>Toll said Patrick’s special dividend, drawn from retained earnings in the Virgin Blue airline, was designed to frustrate its offer and it was still reserving its right to go to the Takeovers Panel on the matter. </p> <p>Toll has also extended the acceptance date for its offer from December 2 to January 9. </p> <p>A Patrick spokesman said the Toll bid was "drifting".</p> <p>The time had come for Toll to share with the market its vision for addressing the lengthy statement of issues the Australian Competition and Consumer Commission outlined two weeks ago, he said. </p> <p>"It is becoming clearer that this ill-conceived bid was the outcome of Toll’s desperation to grow by acquisition without really understanding the complex interactions of national logistics markets," the spokesman said. </p> <p>Toll is expected to tell the ACCC today what assets it may sell to satisfy the commission’s detailed concerns on competition and access in the rail and rail forwarding area. </p> <p>However, the ACCC’s issues paper also raised but did not answer a list of questions related to vertical integration of port and container logistics assets as well. </p> <p>Some analysts believe the ACCC has so far focussed on its case for rail divestment and may take more time even beyond its December 21 deadline to examine port-related questions.</p> <p>But a Toll reluctance today to dispose of enough rail assets to satisfy the ACCC could trigger an eventual thumbs-down, and effectively allow Toll to move the matter into the Federal Court where the burden of proof may be more favourable to the bidding side. </p> <br />