Boardroom struggle leaves Freightways for sale

By DANIEL RIORDAN

A boardroom powerplay across the Tasman could lead to the sale of Freightways Express.

Ausdoc Group, the Melbourne-based owner of the listed courier and freight delivery operator, says it is considering options for its four business units, including Freightways, after disagreement among shareholders over its direction.

Those options might be to retain the company in its present state, sell the business units singly, or invite a takeover bid for the whole Ausdoc Group, Ausdoc managing director Alan Freer said yesterday.

"We're testing the market real time, but we'll await the outcome before we make a decision on what's the best thing for shareholders," he said.

Ausdoc owns all of Freightways' 39 million ordinary shares, but about 1500 New Zealanders own Freightways' preference shares, which carry no voting rights.

Freightways employs around 1000 full-time staff and uses about as many independent contractors.

It lifted its June-year profit by more than a third to $9.9 million on revenue of $176 million.

Freightways' major business units are NZ Couriers and Post Haste. It also owns the Fieldair and Parceline air and road line-haul businesses, Messenger Services (fast couriers), DX Mail (business mail), Online (records management) and Stocklink (logistics).

In May, Freightways raised $30 million through an oversubscribed preference share issue.

The shape of its future ownership is in question after Australian investment bank Babcock and Brown, which owns 5 per cent of Ausdoc, decided to seek board control at Ausdoc's special shareholders' meeting on February 18.

Under B&B's plan, four Ausdoc board members would be dumped and replaced with employees and associates of B&B.

B&B claims support from other shareholders with a combined 50 per cent of the stock, including Ausdoc founder and director Peter Reilly, who holds 14 per cent.

Mr Freer said the current Ausdoc board would resist such a move.

"We're into shareholder democracy, but what B&B is seeking is to take control of the company without making a bid, without paying a premium and without going to shareholders. We think we should go to shareholders, give them all this information and they'll then decide what's in their interests."

Ausdoc has about 5000 shareholders, 20 of them institutions.

Ausdoc chairman Michael Butler said the group had already held discussions with several parties over the acquisition and divestment of certain businesses.

Freightways was an excellent company, said Mr Freer, but he would not speculate on potential buyers.

"That's the whole reason for going to the market [to assess options] rather than speculate. In six weeks we'll all know."

A B&B director and proposed Ausdoc director, Andrew Tyndale, has warned that Ausdoc's late decision to canvass the market risked becoming a fire sale.

Freightways managing director Dean Bracewell said it was business as usual for the company, and declined to speculate on potential buyers.

A general float was an option, but while options were being debated by the parent company, Freightways would stick to its knitting.