Tranz Rail receives Toll's takeover offer

10.30am

Tranz Rail has received notice of Australian transport company Toll Holdings' takeover offer, the company said today.

Tranz Rail board chairman Wayne Walden said the board was now considering the offer and was seeking external valuation and advice.

"The company will communicate with shareholders once that advice has been received," Mr Walden said in a statement.

"Our key focus is looking after the best interest of the company and shareholders," he said.

Toll's bid at 75c a share is 6c below Tranz Rail's closing price yesterday of 81c and the same price as a bid from RailAmerica last month.

Fund managers who own chunky parcels of Tranz Rail have said 75c a share was too low when RailAmerica offered it, and it was still too low.

They value the stock at between $1.30 and $2.

RailAmerica withdrew its bid after Toll bought into Tranz Rail.

Toll said last week its offer would be conditional upon, among other things, regulatory consents, Tranz Rail not disposing of any of its businesses or assets, entering any joint venture or altering its existing debt or capital structure.

Those details were confirmed in Toll's offer today. Toll's bid is conditional on the company gaining at least 50 percent of Tranz Rail.

At 75c a share it would cost Toll $158 million to buy all Tranz Rail's shares. Toll would also assume debt and lease obligations.

RailAmerica estimated these at $236 million, taking the total value of its bid to $394 million.

- NZPA