Tranz Rail directors recommend shareholders reject Toll offer

3.00pm

Tranz Rail's directors today recommended shareholders reject the 95 cents/share takeover offer of Australia's Toll Holdings.

Chairman Wayne Walden said that the directors were doing all they could to encourage superior offers and alternatives.

"In this regard, shareholders who are intending to accept the offer should note that if they do, they will not be able to later withdraw this acceptance and accept an alternative offer should one emerge."

August 29 is the final day for shareholders to decide whether to accept the offer or not unless that date is extended by Toll.

Tranz Rail intends to send out the Target Company Statement on Monday which will provide more information about the directors' recommendation and contain a copy of the Grant Samuel independent report on the offer.

"In Grant Samuel's opinion the offer is not fair to Tranz Rail shareholders and the directors agree," the directors said. The offer is conditional on winning 90 per cent control.

"This makes the offer highly uncertain," the directors said. "Feedback from major shareholders indicates that this condition is unlikely to be satisfied."

They noted the offer was below the current market price of $1.01. "If circumstances change, the directors will review their recommendation and advise shareholders accordingly."

- NZPA