Transport sale draws interest

By Nick Stride

Friday 25th January 2002

A beauty contest will decide the new owner of fast-growing courier and express freight operator Freightways.

The company's owner, struggling Australia-based Ausdoc, this week conducted briefings of interested bidders for Freightways and the other three divisions.

Expressions of interest are due by February and due diligence will begin next month when Ausdoc has identified preferred bidders. Ausdoc has also reported interest in a group takeover.

Freightways has been growing quickly in recent years and is likely to attract keen interest.

It was sold to Ausdoc for $125 million in August 1997 by Tappenden Holdings, the vehicle of New Zealand businessmen Alan Gibbs and Trevor Farmer.

Its after-tax earnings for the June 1998 year were $4.4 million but these have grown by an average 31% a year, to $9.8 million last year.

New Zealand Post tried to buy the company in 1997 but fell foul of the National-led government's aversion to state-owned companies expanding through local acquisitions.

Despite Freightways' success Ausdoc has seen its earnings fall for five years and has had to write off large sums. Last year it lost $A9.6 million.

Its board is under attack from boutique investment bank Babcock & Brown, a 5% shareholder. Babcock is seeking to have four of its nominees appointed to the six-seat board.

Babcock claims the board, which had previously shown no interest in selling assets, is now engaged in "an irresponsible fire sale over a compressed time frame in a cynical effort to protect their own jobs."

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