Shareholders in Toll Holdings are set for a windfall after Japan Post made a $6.
5 billion takeover for the Australian transport and logistics firm.
Japan Post has offered $9.04 for each Toll share, a massive 49 per cent premium to Toll’s closing price on Tuesday of $6.08.
If the deal succeeds, the combined company will be one of the top five players in global logistics.
Toll’s board of directors has unanimously recommended shareholders accept the offer, which chairman Ray Horsburgh says represents full value for Toll shares.
Shares in Toll soared $2.87, or 47 per cent, to $8.95.
Former boss Paul Little, who drove Toll’s rapid expansion in the Asia-Pacific region, will reap nearly $340 million should he accept the offer and sell his five per cent stake.
“It is a great transaction for our shareholders, for our customers and for all of our staff and employees,” Mr Horsburgh said on Wednesday.
Kimber Capital head of research Greg Fraser said it was a good offer, especially considering Toll’s “fairly ordinary” financial performance.
“I don’t think anyone will say no to it. It’s a huge premium,” he said.
The announcement coincided with Toll reporting a 22 per cent slide in first half profit to $134.3 million because of challenging economic conditions, especially the slowdown in the resources sector.
In addition to the Japan Post offer, should it succeed, Toll shareholders will be entitled to a fully franked interim dividend of 13 cents per share in March.
Japan Post wants to use Toll as a platform for expansion in Asia, Europe and North America, to offset a decline in demand for postal services in Japan.
Mr Horsburgh said Australia’s recent free trade agreement with Japan would create tremendous new opportunities for the combined business.
Japan Post’s skills in parcel delivery would also make Toll more competitive against Australia Post.
Toll would retain its name and continue to be run out of Melbourne as a division spearheading Japan Post’s global operations.
Mr Horsburgh said Japan Post had made an incomplete and non-binding proposal to Toll in January.
After Japan Post examined Toll’s books, a formal binding offer was made on Tuesday.
Japan Post president Toru Takahashi described the deal as a transformational transaction, with Toll’s businesses complementing those of Japan Post.
Toll had a strong presence in the Asia-Pacific region, relationships with multi-national companies, and a well-balanced product portfolio.
“In combining our companies and utilising our collective strength, we will create a truly global company,” Mr Takahashi told reporters through an interpreter.
“And we have plans for a significant additional future investment and further growth.”
Federal Trade Minister Andrew Robb said the Japan Post offer represented a massive endorsement of Australian skills, services and expertise.
“This deal, involving one of Australia’s major services companies, will see a substantial injection of capital, opportunities and jobs, in Toll in Australia,” Mr Robb said.