Toll attacks rail profit warnings

By PAM GRAHAM and KEVIN TAYLOR

Toll Holdings managing director Paul Little kept the pressure on Tranz Rail yesterday, calling for more disclosure about the company's lower profit forecasts.

He also said talks with Government officials on Monday were productive, but he spent the day in Wellington without meeting Finance Minister Michael Cullen.

The two sides would continue talking about track infrastructure while both promoted their own offer to shareholders.

Tranz Rail shares closed at 89c, which is below Toll's conditional 95c cash bid, and the Government is offering to buy the track back and buy new shares in the company at 67c each.

Little said shareholders had the right to receive a detailed explanation of why the company cut its operating profit forecast on Monday.

Tranz Rail managing director Michael Beard said the company had received a request from Toll about the profit forecasts late yesterday afternoon and would be responding.

Toll had asked the company to provide additional assurances about its unaudited interim accounts when it notified the company of its new offer and Tranz Rail's board declined the request.

Toll owns 10.1 per cent of Tranz Rail and has a declared interest in expanding in New Zealand, where it already owns stevedoring and warehousing businesses.

Little said his company had not talked to road freight operator Owens Group.

Both companies are bidders for Tranz Rail's trucking and freight forwarding business TranzLink.

"We made our bid under protest. We felt the sale process shouldn't go ahead, but to cover both bases we did put a price in," said Little.

He was "very encouraged" by meetings with shareholders representing about half Tranz Rail's shares and the company was working toward a better understanding of the Government's position.

"At the end of the day I think there is little chance that a Government initiative will pre-empt either what we are doing or what they are doing but clearly we would much prefer to have a closer relationship."

In Parliament, Cullen reiterated that the Government would not get into a bidding war with Toll.

He was not sure if there would be further meetings between Toll and his officials and "I think it is fair to say that they were rather not clear about some aspects of Toll's bid".