Graeme Samuel’s remarkable Saturday afternoon backflip in approving the
revised Toll Holdings bid for Patrick Corp has made him the pin-up boy
of the markets this morning after the value of both companies
soared by $1.1 billion to a combined $11 billion.

Toll has gone from a reputation-challenged $4.297 billion company to
visionary fast-growth takeover machine capitalised at $4.738 billion
after the stock soared 91c to $14.28 in late morning trade.

The intra-day high of $15.20 was a new record for Toll and Patrick also
hit a record after surging 91c to $7.89, lifting its market
capitalisation from $4.897 billion to $5.535 billion.

All this new value will have to come from somewhere and that is the
long-suffering customers who will face an unprecedented transport and
logistics powerhouse in Toll, even after all these additional
undertakings to the ACCC, most importantly the sale of 50% of Pacific
National.

That Samuel went from emphatically rejecting the takeover to strongly
endorsing it clearly surprised Alan Kohler as you can see from
yesterday’s Inside Businesstranscript. Ali Moore was a little softer on Business Sunday as Samuel really went on the offensive to sell his controversial decision.

Chris Corrigan is staying mum this morning, merely saying that Patrick
awaits a “substantially revised” Toll takeover offer within two weeks.
However, don’t be surprised if Patrick now goes ahead and does a deal
with Linfox.

Check out the statements from Toll, Patrick and the ACCC here. Does anyone else sense that Samuel didn’t have the stomach for an expensive court battle?

After all, ASIC is apparently regretting taking on Jodee Rich over the
One-Tel collapse as it just received an additional $4 million from the
government and has now spent $20 million, whilst Rich is up to $11
million in defence costs alone. Under the settlement with the ACCC,
Toll will pay its legal costs.

Australia already has one of the most concentrated corporate sectors in
the world and the nation has suffered from mergers such as Coles and
Myer in 1985 and News Corp’s takeover of the HWT in 1988. Similarly,
the failure to unbundle Telstra hasn’t helped anyone.

Our financial system is now dominated by the big banks, the demise of
Franklins gave us a supermarket duopoly like no other and now we face an
unprecedented transport powerhouse which will be great for shareholders,
but what does it mean for customers, the public and the broader economy?

Peter Fray

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