TOKYO: The state-owned global postal and logistics player, Japan Post, is likely to buy Australia’s Toll Holdings for $5.07 billion, which could be one of the world’s biggest IPOs later this year.
The company unexpectedly offered Aus$9.04 a share for Toll, a 49 percent premium to the company’s closing price on Tuesday, valuing it at Aus$6.49 billion (US$5.07 billion).
The takeover deal – Japan Post’s first overseas acquisition – could make the firm an even more attractive proposition for potential investors when it goes to market, expected later this year.
As well as the healthy profits Toll will contribute to its already-giant coffers, the bid demonstrates Japan Post’s direction of travel and its awareness that it must compete outside its home market – something investors will be eager to see.
Under the proposal, the Melbourne-based transport logistics giant will be run as a division within Japan Post, retaining the Toll name, with the company’s chief executive Brian Kruger reporting to his counterpart Toru Takahashi, the head of the Japanese group’s unit tasked with managing 24,000 post offices in Japan.
Toll has a global network spanning road, air, sea, and rail routes with significant operations in Asia, and Japan Post officials said it was a solid fit for the company as it looks to expand its international footprint.
Taizo Nishimuro, the president and chief executive of the postal service’s parent firm Japan Post Holdings, praised Toll’s international networks and profitable operations.
“With the deal we make our first step into the global sphere,” he told a Tokyo press conference.
“Although we have rich experience in (postal) delivery in Japan, we have no experience in the so-called ‘third party logistics’ (or outsourced logistics) or business-to-business delivery in Japan, not to mention in markets abroad,” he said.
Toll chairman Ray Horsburgh urged shareholders to take the deal, saying it marked a “very powerful combination and (would create) one of the world’s top five logistics companies”.
A shareholder vote will be held in May, with the deal also requiring approval under Australia’s foreign investment laws.
“I don’t think anyone will say no to it. It’s a huge premium,” said Kimber Capital head of research Greg Fraser.
Toll shares rocketed Wednesday to close at Aus$8.95, a 47.20 percent rise that left the stock just below the offer price.
