Toll ups cash element in new offer for Patrick

<p>Toll Holdings has upped its scrip-based bid for Patrick Corp to $7.52 a share, based on Toll’s March 17 close of $14.05, putting the offer near the zone of Patrick’s own expert valuation.</p> <p>Toll will maintain its offer of 0.4 Toll shares for each Patrick share, but will more than double the cash component from 75 cents to $1.90, and will waive its 90% acceptance requirement. </p> <p>On top, Toll will also offer the extra inducements of 20 cents per share if it gets to 90% acceptance, and 10 cents per share if Patrick does not buy FCL Interstate Transport &#8211 a major plank in Patrick’s defence plans.</p> <p>This added cash would in theory, based on the March 17 share price, put the Toll offer at $7.82 a share &#8211 or into the midpoint of Patrick’s expert valuation. </p> <p>Toll shares were down slightly on this morning’s trade (Wednesday, March 22) at $13.68.</p> <p>An analyst noted that Toll described the offer as "full and fair", but not "final", implying that more could come. </p> <p>Other analysts said that the offer should boost Toll’s share price, making it a "self fulfilling prophecy" that the value of the offer would increase.</p> <p>Toll’s first offer in August 2005 was 0.4 Toll shares for each of Patrick’s plus 75 cents in cash and a dividend from Patrick of 0.3 Virgin Blue shares. This was worth $6.66 per share on September 14 last year. </p> <p>Toll said that if the 32 cent cash dividend already paid by Patrick since the release of last year’s target statement is included, the latest offer rises potentially to $8.14 per share. </p> <p>Toll claims that on average, stock broking analysts have re-rated Toll’s shares after a merger with Patrick at $15.82.</p> <p>Toll managing director Paul Little said that the offer was a multiple of 20.8 times Patrick’s earnings before interest, tax, and amortisation compared to 15.5 times ebita in a number of recent port-based takeovers. </p> <p>Mr Little said that Patrick shareholders would have a choice between " a large upfront premium and a large equity participation in a compelling logistics model" and a break-up of Pacific National with a slower development of a much smaller logistics business. </p> <br />