Mayne's Sale Talks Resume
The Age
Saturday September 28, 2002
Mayne Group yesterday put a planned spin-off of its transport business and a $280 million share buyback on hold after revealing it had renewed sale talks with potential buyers.
Investors reacted coolly to the decision, cropping two cents off the stock to a close of $3.50.
The company said the postponed float of its logistics business, Loomis, by three weeks would allow it to consider revised proposals from parties interested in acquiring the business.
But the decision to re-open the bidding marked a reversal of previous steps towards a demerger.
Managing director Stuart James said Mayne had set a deadline of October 31 on the new negotiations so that, if they fall through, the demerger would still be completed by the end of the year.
"In the event that these parties are unable to provide sufficiently attractive and achievable offers for Loomis, the demerger will proceed this year as planned," Mr James said.
Mayne had also planned to release formal documents related to the spin-off at the end of this month, to be followed by a buyback of 75 million shares or 9.3 per cent of issued capital.
Under the new schedule, if the trade sale does not succeed, Mayne will hold a shareholder meeting to approve the Loomis spin-off in the first week of December. Mr James said that would allow the split to be finalised and Loomis to be listed on the Australian Stock Exchange by the end of the year.
The previous plan was to hold the shareholder meeting immediately after the Mayne Group annual general meeting on November 12.
Mayne had previously sought out trade buyers for Loomis, but at the end of last month it announced the spin-off plan, saying potential bidders had not offered enough money.
The health-care group had reportedly sought as much as $700 million for Loomis. Toll Holdings, the Purolator Courier division of Canada Post, Linfox and venture capital groups were named as potential bidders.
Analyst valuations were reportedly closer to $500 million.
The Loomis businesses include contract, express and cash-handling services in Australia; logistics in Asia; and an express business in Canada.
As an independent listed company, it was set to become a relatively small player behind big consolidated logistics groups such as Toll and Australia Post.
Mayne had not planned to raise cash from the demerger, as it is expected to involve a free issue of Loomis shares to Mayne shareholders.
Last month, in an attempt to prompt potential buyers to come out with bids, Mayne pressed towards a spin-off by assembling a high-profile board.
It announced the appointment of its logistics head, David Cranwell, as the managing director-elect of Loomis.
Other nominated directors include BHP Steel deputy chairman Ron McNeilly, National Foods managing director Max Ould, and Adsteam Marine managing director David Ryan.
Toll shares fell 55 cents to $27.65 yesterday.
© 2002 The Age
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