PATRICK CORP Chief Executive Chris Corrigan said last month that his company’s Pacific National joint venture with Toll Holdings is ’totally dysfunctional’ and likely to be broken up.
This could be the dramatic outcome of a bitter row between the two Australian freight and logistics groups that began with Toll announcing a A$4·6bn hostile takeover bid for Patrick on August 22. The bid was immediately opposed by Patrick, but Toll lodged a formal bidder’s statement with the Australian Stock Exchange and the Australian Securities & Investments Commission on September 15. Toll already owns 4·3% of Patrick and is offering to buy all the other shares, which the bid values at A$6·70 each.
On August 22 a Pacific National board meeting had been scheduled to discuss a disagreement between the partners about a contract in Queensland between Toll North and PN, but the meeting was postponed because of Toll’s bid announcement. The issue erupted early in September with Patrick suggesting that Toll had ’short-changed’ PN by up to A$510m over 20 years in a so-called take-or-pay contract which effectively prevented PN from carrying freight in Queensland without arranging it through Toll. Interviewed by ABC’s Inside Business programme, Corrigan called it ’a grubby, grubby deal’, and on September 5 Patrick instigated formal dispute proceedings after it was unable to persuade the PN board to agree to an independent investigation.
A Patrick spokesman told Lloyd’s List Daily Commercial News that ’this process has as its end point the breaking-up of Pacific National’, which would see the assets auctioned off to the two shareholders.
In the meantime Toll’s bid for Patrick will have to pass the scrutiny of the Australian Competition & Consumer Commission, which on September 7 had rejected Patrick’s bid to acquire Victorian freight forwarder FCL Interstate Transport Services.
