Overseas investment decision for case 200720032 - Toll Group (NZ) Limited

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment. The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Background:
Toll Group (NZ) Limited (TGL), a wholly owned subsidiary of Toll Holdings Limited (Toll), was granted consent on 29 August 2003 (A200310149/D200320029) to acquire 100 percent of Tranz Rail Holdings Limited (now Toll NZ Limited (Toll NZ)). This consent lapsed on 29 August 2004. TGL currently holds 84.24 percent of Toll NZ Limited.

Outline of the proposed investment:
TGL seeks consent to acquire the remaining 15.76 percent of the shares and all outstanding share options (approximately 5%) in Toll NZ that it does not already own. TGL has entered into a Lock-In Agreement with a United States of America based fund manager, Third Avenue Management LLC, to acquire its 10.01 percent interest in Toll NZ. TGL lodged a takeover notice with Toll NZ on 29 June 2007 to make an offer under the Takeovers Code for the acquisition of all the equity securities in Toll NZ.

Rationale for the proposed investment:
Toll NZ is a provider of integrated road, rail and sea services in all major areas of the transport and logistics sector in New Zealand. Toll NZ's business units include Toll Rail, Toll Tranz Link, The Interislander, Tranz Metro and Tranz Scenic. TGL believes the acquisition can contribute additional financial capital and operational and technical experience that will be highly beneficial to improving Toll NZ's performance and service levels in a way that generates long-term benefits for all stakeholders in New Zealand's transport industry and the broader economy.

The proposed acquisition will enable TGL to consolidate its already significant presence in New Zealand and enable better integration of Toll NZ's businesses into the wider Toll Group resulting in increased efficiencies and enhanced opportunities for growth.

The proposal is likely to result in the following benefits:

1. the proposed acquisition is likely to enable Toll NZ to achieve greater efficiencies, due to the better integration of Toll NZ into the Toll Group.