Toll leaves Virgin boss up in the air
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Toll leaves Virgin boss up in the air
Sat "Weekend Australian"
Toll happy for a holding pattern on Virgin Blue
Steve Creedy
April 15, 2006
A DECISION on Virgin Blue's future could take up to 18 months in the wake of Patrick Corp's surprise decision to accept the latest takeover bid by Toll Holdings.
While Virgin founder Richard Branson might be keen to start mapping out a future for Australia's second-biggest airline, Toll boss Paul Little made it clear yesterday that he was in no hurry to start carving up the carrier.
Sir Richard has made no secret of his desire to regain a controlling interest in the airline and threw his support behind Toll with that end in mind.
But Mr Little said yesterday that Toll had no immediate plans to sell Patrick's 62.4 per cent stake in Virgin Blue to Sir Richard.
"In fact, it's quite the opposite," Mr Little said. "We believe to maintain our (options) at this stage is in the best interests of Toll and Toll's shareholders.
"And it may take six months, it may take 12, it may take 18 months to decide what to do with that."
Toll's original bid contained a proposal that would have seen 15 per cent of Patrick's stake in Virgin Blue offered to the public, 20 per cent handed to Patrick shareholders and 15 per cent sold to Sir Richard.
But that agreement, which has a break fee of $12.5 million, was effectively superceded when Toll launched a simplified bid for Patrick last month.
Mr Little believes that strategies adopted by Virgin Blue to improve yields and passenger loads have made the low-cost airline a better business than it was when Toll launched its bid.
He said Toll was not obliged to deal with Virgin Blue but there was a willingness to continue to talk to it.
He said the underwriting agreement was effectively out of date.
"Should we wish to move away from it, which clearly we would because Virgin Blue today is a different business to the Virgin Blue business when we put our bid in place, there's a break fee there.
"But the break fee is something that will only be paid if we can't reach some sort of agreement going forward.
"So really to a large extent the ball's in the Virgin Group's camp there."
The Toll boss said he had not had any recent discussions with Sir Richard about the airline and Toll and was in no hurry to begin negotiations.
"Our view going forward is we need to understand this business better," Mr Little said. "It's a business that has a lot of potential for us in terms of the freight compatibility, for both domestic and ultimately international type freight capacity."
Welcoming the deal, Sir Richard said he looked forward to a speedy resolution of the takeover and working with Mr Little to map out the future direction of Virgin Blue.
"It has been a long time since (Patrick boss) Chris Corrigan surprised us with a hostile bid for Virgin Blue," he said in a statement.
"Since then, we have been very vocal about regaining control of the company.
"The only way for us to achieve this was to find someone who had enough courage to take control of Patrick Corp.
"Fortunately, Paul Little had similar aspirations and has successfully achieved a great outcome after what has been a very intense and public fight."
Virgin Blue shares closed up 2c at $1.87 on Thursday, 47c higher than when Toll's bid was first launched.
====================================================
Sat "Herald Sun"
Virgin up in the air
Mathew Charles
15apr06
SIR Richard Branson will need to think again if he thought Paul Little's triumph would pave the way for him to regain immediate control over Virgin Blue.
The British tycoon may now find himself in a bidding war against well-heeled rivals such as Singapore Airlines or ignored altogether if Toll keeps control.
The Federal Government has previously knocked back Singapore's bid to establish a route from Australia to the United States.
But gaining a stake over Virgin would put it back in contention provided it did not exceed 50 per cent.
Patrick boss Chris Corrigan ousted the Virgin Group as the majority shareholder in the airline after Patrick launched a successful $1.1 billion hostile takeover early last year.
Mr Little yesterday said Sir Richard and Toll enjoyed close relations but "we are not obliged to deal with the Virgin Group".
When Toll launched its $5.8 billion bid for Patrick last August it agreed -- if the bid proved successful -- to sell a 15 per cent stake in the airline to Sir Richard's Virgin Group.
However, Mr Little said this agreement was now "effectively out of date" and said Toll wanted to ditch it. To do that Toll would need to pay Sir Richard's group a $12 million penalty.
However, Mr Little stressed Toll was leaving its options open.
But if Toll does abandon Sir Richard then cashed-up predators such as the Singapore Government's Temasek Holdings, which is the major shareholder in Singapore Airlines, may be tempted to run the ruler over the airline.
Mr Little also suggested Virgin would make an attractive asset within the Toll empire.
"It's a business that has a lot of potential for us in terms of freight compatibility both domestically and ultimately, internationally," Mr Little said.
He said "it may take six months, it may take 12, it may take 18 months for us to decide what to do" with Virgin Blue.
Nevertheless Sir Richard savoured Toll's victory. "It has been a long time since Chris Corrigan surprised us with a hostile bid for Virgin Blue," he said in a statement.
Sir Richard has spent the past year exploring ways to regain control over Virgin Blue ever since his humiliating loss to Mr Corrigan.
"The only way for us to achieve this was to find someone who had enough courage to take control of Patrick Corp."
He described the eight-month battle for Patrick as "a very intense and public fight".
The $5.8 billion takeover battle was widely seen as a major distraction to Virgin Blue at a time when it needed to focus on rocketing oil prices and new competitor Jetstar.
However, since the airline first took to Australian skies in 1999 it has captured more than 35 per cent of the market. It is also working on an application to establish a route from Australia to the United States.
The writer owns shares in Toll Holdings.
============================================================
Toll happy for a holding pattern on Virgin Blue
Steve Creedy
April 15, 2006
A DECISION on Virgin Blue's future could take up to 18 months in the wake of Patrick Corp's surprise decision to accept the latest takeover bid by Toll Holdings.
While Virgin founder Richard Branson might be keen to start mapping out a future for Australia's second-biggest airline, Toll boss Paul Little made it clear yesterday that he was in no hurry to start carving up the carrier.
Sir Richard has made no secret of his desire to regain a controlling interest in the airline and threw his support behind Toll with that end in mind.
But Mr Little said yesterday that Toll had no immediate plans to sell Patrick's 62.4 per cent stake in Virgin Blue to Sir Richard.
"In fact, it's quite the opposite," Mr Little said. "We believe to maintain our (options) at this stage is in the best interests of Toll and Toll's shareholders.
"And it may take six months, it may take 12, it may take 18 months to decide what to do with that."
Toll's original bid contained a proposal that would have seen 15 per cent of Patrick's stake in Virgin Blue offered to the public, 20 per cent handed to Patrick shareholders and 15 per cent sold to Sir Richard.
But that agreement, which has a break fee of $12.5 million, was effectively superceded when Toll launched a simplified bid for Patrick last month.
Mr Little believes that strategies adopted by Virgin Blue to improve yields and passenger loads have made the low-cost airline a better business than it was when Toll launched its bid.
He said Toll was not obliged to deal with Virgin Blue but there was a willingness to continue to talk to it.
He said the underwriting agreement was effectively out of date.
"Should we wish to move away from it, which clearly we would because Virgin Blue today is a different business to the Virgin Blue business when we put our bid in place, there's a break fee there.
"But the break fee is something that will only be paid if we can't reach some sort of agreement going forward.
"So really to a large extent the ball's in the Virgin Group's camp there."
The Toll boss said he had not had any recent discussions with Sir Richard about the airline and Toll and was in no hurry to begin negotiations.
"Our view going forward is we need to understand this business better," Mr Little said. "It's a business that has a lot of potential for us in terms of the freight compatibility, for both domestic and ultimately international type freight capacity."
Welcoming the deal, Sir Richard said he looked forward to a speedy resolution of the takeover and working with Mr Little to map out the future direction of Virgin Blue.
"It has been a long time since (Patrick boss) Chris Corrigan surprised us with a hostile bid for Virgin Blue," he said in a statement.
"Since then, we have been very vocal about regaining control of the company.
"The only way for us to achieve this was to find someone who had enough courage to take control of Patrick Corp.
"Fortunately, Paul Little had similar aspirations and has successfully achieved a great outcome after what has been a very intense and public fight."
Virgin Blue shares closed up 2c at $1.87 on Thursday, 47c higher than when Toll's bid was first launched.
====================================================
Sat "Herald Sun"
Virgin up in the air
Mathew Charles
15apr06
SIR Richard Branson will need to think again if he thought Paul Little's triumph would pave the way for him to regain immediate control over Virgin Blue.
The British tycoon may now find himself in a bidding war against well-heeled rivals such as Singapore Airlines or ignored altogether if Toll keeps control.
The Federal Government has previously knocked back Singapore's bid to establish a route from Australia to the United States.
But gaining a stake over Virgin would put it back in contention provided it did not exceed 50 per cent.
Patrick boss Chris Corrigan ousted the Virgin Group as the majority shareholder in the airline after Patrick launched a successful $1.1 billion hostile takeover early last year.
Mr Little yesterday said Sir Richard and Toll enjoyed close relations but "we are not obliged to deal with the Virgin Group".
When Toll launched its $5.8 billion bid for Patrick last August it agreed -- if the bid proved successful -- to sell a 15 per cent stake in the airline to Sir Richard's Virgin Group.
However, Mr Little said this agreement was now "effectively out of date" and said Toll wanted to ditch it. To do that Toll would need to pay Sir Richard's group a $12 million penalty.
However, Mr Little stressed Toll was leaving its options open.
But if Toll does abandon Sir Richard then cashed-up predators such as the Singapore Government's Temasek Holdings, which is the major shareholder in Singapore Airlines, may be tempted to run the ruler over the airline.
Mr Little also suggested Virgin would make an attractive asset within the Toll empire.
"It's a business that has a lot of potential for us in terms of freight compatibility both domestically and ultimately, internationally," Mr Little said.
He said "it may take six months, it may take 12, it may take 18 months for us to decide what to do" with Virgin Blue.
Nevertheless Sir Richard savoured Toll's victory. "It has been a long time since Chris Corrigan surprised us with a hostile bid for Virgin Blue," he said in a statement.
Sir Richard has spent the past year exploring ways to regain control over Virgin Blue ever since his humiliating loss to Mr Corrigan.
"The only way for us to achieve this was to find someone who had enough courage to take control of Patrick Corp."
He described the eight-month battle for Patrick as "a very intense and public fight".
The $5.8 billion takeover battle was widely seen as a major distraction to Virgin Blue at a time when it needed to focus on rocketing oil prices and new competitor Jetstar.
However, since the airline first took to Australian skies in 1999 it has captured more than 35 per cent of the market. It is also working on an application to establish a route from Australia to the United States.
The writer owns shares in Toll Holdings.
============================================================
Last edited by Wirraway; 15th Apr 2006 at 05:49.
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However, Mr Little said this agreement was now "effectively out of date" and said Toll wanted to ditch it. To do that Toll would need to pay Sir Richard's group a $12 million penalty.
