Toll move clears path for Mainfreight

The 19-month stand-off between two of the heavyweights of the New Zealand transport sector is over.

Freight company Mainfreight will get full control of logistics company Owens after rail operator Toll Holdings yesterday sold its blocking stake. Mainfreight now has a 91.54 per cent stake after Toll sold 11.58 per cent for $1.17 a share.

Under New Zealand takeover rules, Mainfreight can compulsorily acquire the rest of the shares.

Toll blocked Mainfreight's bid to take over Owens in October 2003.

Tense times followed.

Mainfreight is a rival of the Australian-owned Toll, the company formerly called Tranz Rail that operates the national rail network. Mainfreight is also a Toll customer.

From Australia, Toll managing director Paul Little said Toll's purchase of the Owens stake was part of a strategy to unlock operating synergies between the three companies. He believed that strategy had been successful.

"We're just moving on."

Little said Owens had not been paying dividends to shareholders. "It makes no sense for us to have $6 million or $7 million invested in an entity that's doing nothing for us."

He said the sale was not in exchange for any concession on Mainfreight's side.

Mainfreight paid $1.10 a share for its original stake, while Toll paid $1.16 a share. Shares in Owens have ranged between 85c and $1.15 over the past 12 months and yesterday jumped 30c, or 35 per cent, to $1.15.

Mainfreight shares gained 20c to $2.30, having traded between $1.74 and $2.75 in the past year.

Little said: "I think now the relationship between our two groups has settled down."

Mainfreight and Toll were fierce competitors but "we're not there to blow Mainfreight out of the water and I think they now realise that".

- additional reporting, NZPA