Toll sues over Macquarie plan

A successful bank bid would thwart Toll's ambition to control the movement of goods across Australia. Picture / Bloomberg

SYDNEY - Toll Holdings, which has offered A$5.8 billion ($6.98 billion) to buy Patrick Corp, is suing Patrick chief executive Chris Corrigan and chairman Peter Scanlon, saying they sought a higher bid from Macquarie Bank.

"Toll believes Patrick's board was soliciting an alternative offer from Macquarie within 24 hours of signing the deed of agreement with Toll," the Melbourne-based company told the stock exchange yesterday. Patrick said it hasn't solicited Macquarie or breached any agreement with Toll.

Sydney-based Macquarie said on May 5 it may make a cash offer for Patrick at a premium to Toll's bid, which Patrick agreed to on April 14. Toll, Australia's biggest freight company, called the rival plan a "con job".

A successful bid from Macquarie would thwart Toll CEO Paul Little's ambition to buy Patrick and control the movement of goods across Australia. Little battled Corrigan for eight months, increasing his bid twice, before winning acceptance to add Patrick's ports and airline to Toll's road and rail freight transport network.

Macquarie, the nation's biggest investment bank, is planning to buy Patrick and sell a half stake in its ports to Singapore's PSA International, according to a statement from Melbourne-based Toll on Sunday.

"Toll will take all steps legally and commercially available to it to prevent this flawed transaction going ahead," the company said. Little said on Friday he may stop sending goods on Pacific National, Toll and Patrick's rail freight joint venture, if a rival takes charge.

Macquarie would sell the remainder of Patrick's ports, combined with closely held trucker Linfox Group and freighter FCL Interstate Transport Services, in an initial public offer six months later, Little said, calling the deal a "smoke, mirrors and 'pass the parcel' game".

Toll's comments on Macquarie's plans "contain a number of material misstatements and errors," the bank said in a statement e-mailed to Bloomberg. It didn't elaborate.

Macquarie Bank has just agreed to pay a record US$3.85 billion for an Indiana toll road, and in the past year acquired explosives maker Dyno Nobel and Copenhagen Airport.

Any offer from Macquarie for Patrick may be defeated by a higher bid from Toll, said Matthew Crowe at JPMorgan Chase.

- BlOOMBERG