Toll board backs $6.5 billion takeover bid by Japan Post; Investors wipe $600 million off Seek share price despite 64% jump in profit: Midday Roundup

The board of directors for Toll Holdings has issued a statement unanimously recommending the takeover of the Australian logistics giant by Japan Post.

According to the statement, the proposal will see Japan Post acquire Toll under a scheme of arrangement for $9.04 per share, representing a 49% premium to yesterday’s closing price.

The deal is designed to help transform Japan Post develop a global logistics platform, with Toll’s existing brand and management to remain in place following the deal.

Toll shareholders on the register on March 4 2015 will also receive a $0.13 cash per share fully franked interim dividend for the 2015 financial year, which will be paid on April 2.

Fairfax reports the deal will be especially good for Paul Little, who led a management buyout of the company in the mid-80s and ran the company until the end of 2011, with the deal expected to net him a $340 million windfall.

The deal is still subject to a shareholder vote, as well as federal government and foreign investment regulatory approval.

“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. In partnership with Toll we are starting a new chapter of looking outward and becoming a leading global player,” said Japan Post chief executive Toru Takahashi.

Investors wipe $600 million off Seek share price after 64% jump in profit

Shares in online jobs marketplace Seek have plummeted 8.7%, or around $600 million, despite the company posting an increase in both profit and revenue for the first half of the financial year.

Seek posted a 64% jump in first-half profit to $182.8 million, a new record for the company. The result came off a 17% increase in revenues to $395.3 million.

Along with the strong result, Seek chief executive Andrew Bassat announced a 35% increase in interim dividends.

However, despite the strong result, the company’s share price was hammered by investors after underlying net profit after tax came in 6% below expectations.

Shares up on open

Aussie shares have been given a boost this morning, led by a jump in the price of shares in Toll Holdings.

But despite investors welcoming the Toll news, Tristan K’Nell, head of trading at Quay Equities, played down expectations of gains among other stocks.

“With little on the economic agenda today and investors continuing to digest some misses on the earnings front, I think the market will drift sideways with a slight gain on light volume,” K’Nell said in a statement.

The S&P/ASX 200 benchmark was up 31.3 points to 5889.5 points at 12.24pm AEDT. On Tuesday, the Dow Jones closed 28.23 points higher, up 0.16% to 18047.6 points.