Patrick Corporation CEO Chris Corrigan gave a feisty interview to Alan Kohler on Inside Business
yesterday in which he expanded on his earlier written allegations about
the Pacific National deal with Toll Holdings in Queensland, including
the following lines:
CHRIS CORRIGAN: We’ve had a major problem in Queensland
where Toll, essentially, got Pacific National to set up a network in Queensland
with them as a core customer. What’s turned out is that they’ve morphisised the
approval that they got from the board into a memorandum of understanding, which
they claim is now legally binding and which basically monopolises for 20 years
Pacific National’s capacity to operate in the Queensland market. I mean, this is
an extraordinary thing, and in the process the economics have also changed
dramatically. So we have a major business issue. This is a grubby, grubby deal
and it’s a deal which they are trying to avoid having examined.
ALAN KOHLER: You were going to fall out, or were in the
process of falling out, with Paul Little and Toll before the bid was
CHRIS CORRIGAN: Absolutely. I have written letters that
pre-date the bid which basically call into question the probity of this deal and
the people that were involved in it. We’ve discovered, quite recently, that two
of the senior executives of Pacific National, who were involved in the
negotiation of this deal with Toll, were not only on the Toll payroll but are
actually still incentivised by Toll under the Toll options scheme. So you had a
situation where basically Toll employees were negotiating with Toll and changing
the deal that the board had agreed to.
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This is all good and well, although Toll claims
the net present value is only $20 million whereas Patrick is claiming a
revenue loss of $500 million over 20 years, which proves the old adage
that there are “lies, damn lies and statistics”.
What Corrigan conveniently ignored is that Toll
is now offering to pay a premium to buy the entire business, so if Toll
has really screwed its partner with this “grubby” value-destroying
deal, why would they want to buy all of Patrick?
Meanwhile, did anyone else spot the braces on
Corrigan’s top teeth? No wonder he was talking without opening his
mouth much? The lad turns 60 next year and is obviously planning to be
around for a long time.