SYDNEY: Japan Post flexed its muscles with a $5.07 billion takeover bid for Australia's Toll Holdings Wednesday in a move set to bolster its appeal ahead of what could be one of the world's biggest IPOs later this year.
The behemoth, a state-owned global postal and logistics player, 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).
Under the proposal, the Melbourne-based transport logistics giant will be run as a division within Japan Post and retain the Toll name, with the company's chief executive Brian Kruger reporting to his counterpart Toru Takahashi.
Toll has a global network spanning road, air, sea, and rail routes with significant operations in Asia, and Takahashi said it was a perfect fit for Japan Post as it looks to expand its international footprint.
"We believe the combination of Japan Post and Toll will be a transformational transaction for both our companies and we are very pleased we have been able to reach agreement," he said.
"In partnership with Toll we are starting a new chapter of looking outward and becoming a leading global player."
Toll chairman Ray Horsburgh recommended that shareholders back the deal.
"Japan Post is one of the world's leading postal and logistics companies and Toll is the largest independent logistics group in the Asia-Pacific," he said.
"Together, this will be a very powerful combination and one of the world's top five logistics companies."
A shareholder vote will be held in May, with the deal also requiring approval from Australian Treasurer Joe Hockey under the nation's foreign investment laws.
Kimber Capital head of research Greg Fraser said it was too good an offer to reject.
"I don't think anyone will say no to it. It's a huge premium," he said.
Toll shares rocketed nearly 50 percent when they relisted Wednesday, settling around Aus$8.94 in early afternoon trade, slightly below the offer price.
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