Reports in the Australian Financial Review’s Street Talk column are asking the question, is Toll up for sale? The reports suggest Japan Post are looking for an entity that may be interested in investing in the Australian logistic giant, to enable it to extricate itself from its current position.
Japan Post paid $8 billion for Toll Holdings, five years ago. This week the AFR revealed that the Japanese owners were canvassing potential investors, from a number of investment banks to get a feel for whether there would be any interest in taking the enterprise off its hands.
A number of salvage plans are reported as being considered by the current owners as Toll reports lower than expected earnings and has survived a major cyber attack just recently.
The Australian part of the Toll business had been performing relatively well until the ransomware cyber attack which saw Toll shut down its vital online systems and process freight manually, until it could clear out the virus.
According to the reports, the main concern is the Toll operation outside of Australia, which has not been performing as well as Japan Post assumed when deciding to acquire the operation in 2015.
A value of $2.5 billion is expected to be considered as a fair price for what is on offer. This is said to make investing in Toll Holdings appear to be an attractive option for some investors. This is because there is potential to grow the overall business from its current position.
However, the effect of the current Covid-19 crisis will have the effect of further denting possible profits, with losses predicted to top $300 million, following on from a $113 million loss which was reported to the Australian market last year.
The current situation is surprising to many observers, just five years ago, as the sale went through, who saw the cashed-up Japan Post as a good long term bet to keep hold of Toll, and an entity which had the investment dollars to grow it.