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Toll Holdings has offered to bring in a new investor to rail group Pacific National as part of a last-ditch attempt to gain regulatory approval for its hostile $4.6 billion takeover of Patrick Corp.
In a submission to the Federal Court, Toll also offered to divest a number of businesses in shipping and auto logistics to get the Australian Competition and Consumer Commission onside.
Toll's undertakings aim to allay the concerns the competition watchdog voiced in its statement of claim to the court. The ACCC has sought an injunction to stop the takeover.
Toll said it would preserve the 50:50 joint venture structure it has with Patrick in Pacific National by introducing a new independent partner once the takeover is completed.
Toll would also have the rail group relinquish its grandfathering rights over train routes when its track access agreement expires on June 30 this year.
This would leave the network owner, the Australian Rail Track Corporation, free to allocate future train routes. Pacific National inherited these track rights from National Rail, bought by Toll and Patrick four years ago.
Toll's other undertaking are:
■ It will make available assets for a new or existing operator on the east-west rail corridor. These would include rolling stock, train paths, terminal access and crews for up to three services a week.
■ It will sell all Patrick's Bass Strait shipping and freight forwarding operations.
■ It will divest its interest in PrixCar and in either Patrick or Toll's vehicle transport distribution business.
Toll also vowed to sell the Minto rail siding in Sydney and provide "hook and pull" services to east-west rail rival SCT until SCT gets its new locomotive fleet.
The court has asked the ACCC to reply to Toll's undertakings by March 14. Toll released its undertakings after Justice Merkel insisted yesterday that he have concrete proposals on which to make a judgement. He set a directions hearing for March 17.
Patrick's managing director, Chris Corrigan, said Toll's undertakings were commercially irrational and undeliverable.
"Toll is now offering Patrick shareholders the opportunity to dilute their exposure to ports, rail, shipping and car distribution," he said.
"It's difficult to see how Toll could make itself less attractive to Patrick shareholders … This latest set of proposals makes the bid commercially absurd."
Toll should allow the break-up of Pacific National, he said.
Patrick has taken action in the Supreme Court to disband Pacific National; Toll has taken counter-action to stop the break-up and have Mr Corrigan and Alan Davies sacked as directors.
Toll shares closed 25c higher at $11.60.
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