Logistics firm moots float plan

By DANIEL RIORDAN

Brokers are being asked to value a float of Freightways Express as an alternative to a trade sale of the transport company.

The canvassing, by investment bank CS First Boston, comes as directors of Freightways' parent, Melbourne-based Ausdoc Group, prepare to meet next Thursday to review offers from potential trade buyers who have been doing due diligence on Freightways for the past month.

Insiders believe a trade sale to bidders such as Australia's Toll Holdings is the most likely option.

If bids aren't to Ausdoc's liking, a float is the next alternative, followed by "do nothing."

Ausdoc in December put itself, its New Zealand subsidiary and its Australian subsidiaries up for sale - as a whole or in parts - after global investment bank Babcock & Brown threatened to take over Ausdoc and break it up.

Ausdoc owns all of Freightways' ordinary shares, but about 1500 New Zealanders own listed preference shares.

Brokers are being asked to indicate a price range for the company.

One Australian media report suggested the company could be floated for $240 million, but one fund manager the Business Herald spoke to said that figure was far too high.

Another, who also asked not to be named, said a figure of between $100 million and $150 million would be more realistic for the company.

Clearly, however, the float would be well-received - depending on price - by a market starved of equity issues.

A preference share issue by the company last May was heavily oversubscribed.

Freightways made a net profit of $6.9 million in the half year to December on revenue of $93.7 million.

The company has about 1000 full-time staff and uses about as many independent contractors.

Its main business units are NZ Couriers and Post Haste.