Toll, Patrick claim wins as Linfox drops hints

Both Toll Holdings and Patrick Corp have moved to claim wins in Friday’s (March 31) hearing at the Supreme Court of Victoria. Toll said the delay of Patrick’s action on Pacific National until a week after Toll’s latest offer closed on April 28, had "freed the bid from legal uncertainty", with the parties now back in court for a directions hearing on May 5. But Patrick said the intervention of the Australian Competition and Consumer Commission in the case, including a request to have the case heard in the Federal Court, had left the "Toll bid stuck in legal limbo". Patrick said the ACCC’s intervention meant that it was likely Toll would have to explain in the Federal Court "how their undertakings could be either legal or enforceable". "The court will now be deciding on a question fundamental to the future of Toll’s bid," Patrick said. "Can Toll give the ACCC undertakings without breaching the Corporations law and existing contracts it has entered into, and can they implement the undertakings? "If the court rules against Toll, their bid will fail again." Toll’s statement had dismissed the importance of the matter, saying that "the proceedings cannot interfere with the undertakings given to the ACCC and therefore do not need to be dealt with prior to the outcome of the bid". Meanwhile, in a lengthy interview with the Australian Financial Review , Lindsay and Peter Fox, of Linfox, both slammed the effect that the ACCC’s green light to the Toll bid would have on the rest of the transport industry, and hinted at throwing their lot into a new alliance with Patrick, or others. "What Graeme Samuel has allowed to happen is for a player to emerge that is literally the closest thing to a monopoly that you have ever seen," Peter Fox told the paper. "If the Toll&#47Patrick thing does come together, it is not fundamentally good policy to have one Australian publically-traded transport company. &#8220I can’t comprehend them allowing it." Though the pair ruled out a direct sale of Linfox, Peter Fox said the company could now take different forms to 100% ownership. Lindsay Fox speculated that "nobody is better equipped to plug into port and rail operators than Linfox, in Australia it is almost like they (Patrick) have the hardware and we have the software". There has been speculation that Macquarie Bank might back such a deal, outbidding Toll and avoiding the merger being ruled out by the Takeovers Panel as a deliberate frustration of the Toll offer. Toll has continued to bait Patrick to reveal other bidders for the company and to hose down expectations of more from Toll. The Australian also reported today (Monday, April 3) that Toll could be getting ready to declare its bid final, which is likely to halt Patrick’s share price rise and focus Patrick shareholders on the bid. "Toll notes that Patrick has failed to produce any substantive alternative to the Toll offer," Toll said. "Despite Patrick’s best efforts to portray Toll as being committed to buying Patrick at any price, sadly for Patrick shareholders this is not the case. "Toll sees no reason to bid against itself to acquire Patrick. Toll will not overpay for Patrick." Toll’s scrip and cash offer, with all conditions for extra cash fulfilled, was worth $7.82 based on Toll’s March 14 close of $14.05. Toll was trading this morning down slightly at $13.20, and Patrick down slightly at $8.04.

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