Rail firm spikes on share swoop

By PAM GRAHAM

Rail company Toll NZ's share price spiked 4 per cent yesterday as a mystery buyer swooped, picking up 2.5 million shares at $1.98 each.

The price is a two-year high as investors punt on the majority shareholder, Toll Holdings, of Australia, paying up to secure 100 per cent of the company.

The big seller yesterday was the Accident Compensation Corporation, with about two million shares.

The most likely buyer was Third Avenue Management, the New York fund that owns 5.2 per cent of Toll NZ.

ABN Amro brokered most of yesterday's sales but declined to comment.

Another shareholder, Guardian Trust Funds Management, confirmed it had been approached to sell but would not say if it had done so.

Toll snared 84.2 per cent of Tranz Rail after last year's $1.10 takeover offer and renamed the firm Toll NZ.

The shares traded yesterday were just over 1 per cent of the company.

In other news on Toll NZ yesterday, it was disclosed that the company's long-distance passenger operator, Tranz Scenic, was in default of its banking facilities this year.

The details emerged when the stock exchange, NZX, disclosed the details of a listing rule waiver that allowed Tranz Scenic to obtain a loan from the Toll Group without shareholder approval.

The value of the loan from Toll Finance was up to $18 million.

Toll NZ sought the waiver in June from rules relating to material transactions with related parties.

According to NZX, Tranz Scenic's bank facility and treasury facilities were in default and the business needed urgent refinancing.

Publication of the NZX decision was delayed until after that refinancing was approved.

In May, Toll NZ bought back the 50 per cent of Tranz Scenic it did not own. The stake had been sold to Australia's West Coast Railway in 2001.

Tranz Scenic runs passenger services between Auckland and Wellington, Palmerston North to Wellington, Picton to Christchurch and Greymouth-Christchurch.