Patrick laughs at Toll's bid

SYDNEY - Australia's Toll Holdings must raise its bid for ports operator Patrick Corp much higher to win support, Patrick says.

Patrick shareholders are bemused by Toll's A$4.7 billion ($5 billion) hostile offer to create Australia's biggest transport group, chief executive Chris Corrigan says.

"I'm obviously in touch with our shareholders," Corrigan said yesterday. "They share, for the most part, my bemusement with this offer. They share a feeling of confusion about why they'd be interested in taking the offer on the table.

"I don't sense any support for the offer."

Toll said the small number of acceptances so far was expected because Australia's antitrust watchdog was still reviewing the proposal. A ruling is due by December 21.

"At this stage the feedback that we have from the investor community is extremely positive because they see that Toll has a good track record of delivering shareholder return and a clear vision for growth in the future," a Toll spokesman said.

Corrigan's comments came after Patrick reported a 3.5 per cent fall in annual net profit before one-off items to A$181.8 million on a weaker profit from its 62.4 per cent-owned airline Virgin Blue.

Patrick had flagged the full-year result last month.

Virgin Blue was 7Ac higher at A$1.89 after it announced on Wednesday that it would return A$262 million in cash to shareholders in its first-ever dividend.

Patrick will pay a final dividend of 8Ac a share and a special dividend of 24Ac flowing from Virgin Blue's dividend.

Corrigan declined to comment on speculation that Linfox, Australia's largest privately owned logistics group, and Macquarie Bank might bid for Patrick.

He told analysts that the Toll-Patrick joint venture Pacific National, Australia's largest private rail freight operator, was likely to be broken up "in some form" even if the bid lapsed as the two companies' relationship had deteriorated.

- REUTERS