Cullen rejects olive branch from Toll Holdings

Toll Holdings has offered an olive branch to Finance Minister Michael Cullen over Tranz Rail, but it was rejected.

The company revealed last night that it had sought a meeting with Cullen "to clear up any misconceptions" but had been turned down.

In response, the minister's office released details of correspondence between the two which indicated that the Government wants to secure ownership of the tracks before talks.

Toll Holdings managing director Paul Little said he was disappointed by the rejection but was still interested in owning and operating Tranz Rail while the Government owned the tracks.

Toll's approach came a day after Cullen indicated to the Business Herald that the company was in his bad books for ignoring a suggestion that the two could take a joint approach to Tranz Rail and proceeding with its own takeover offer.

Little wrote to the minister saying that these comments were "deeply concerning" and appeared to be the result of a misunderstanding. To clear things up he suggested a personal meeting within the next week.

But Cullen's reply said the Government had now committed to a course of action "and I do not see any realistic possibility of us backing away from that course".

After the Tranz Rail shareholders' meeting - which will decide on the competing offers from Toll and the Government - there could be an opportunity to discuss the possibility of the Government exiting its shares with Toll "or other potentially interested players".

Little said Toll successfully operated rail businesses in Australia, where the tracks were owned by state governments, and had always been willing to consider similar arrangements in New Zealand..