Freightways - FRE

[xpress]

The comment I was referring to from the CEO was in an article a couple of weeks ago where he said that they were not looking at any new business directions (or words similar). I just thought that comment was interesting as no one had said they were! I'm only trying to read between the lines.

[xpress]

If it was the Origin angle you were referring to, the CEO of Origin Pacific stated in the Christchurch Press and NZ Herald about a month ago that they are looking for a business partner(rather than an investor) to help grow the company.

[Prophet]

It was the Origin aspect I was interested in.

But as of this mornings Herald it seems Dean Bracewell would like to compete with DHL to buy Courier Post - effectively asking for an open tender on this Govt owned asset. Good on him!

[Seti]

Based on criteria in a Commerce Commission decision back in 1997, (http://www.comcom.govt.nz/publicatio....cfm?mr_id=161)in particular "In one market, that for national overnight parcel delivery, NZ Post and Freightways are the only two competitors with comprehensive distribution networks", I don't think things have changed all that much and I can't see the CC approving a Freightways/Courier Post tie up.

[Prophet]

Well xpress I'm not sure if your wish for FRE to get into bed with Origin Pac has come true but we will soon find out. There is an interesting (or maybe not) reference to the core freight business at the end of this STUFF article.

New investor hops on board Origin Pacific
09 March 2004
By ROELAND VAN DEN BERGH

Origin Pacific has found a new investor and hopes to have three on board by the end of March, managing director Robert Inglis says.


The Nelson-based commuter airline engaged KPMG at the end of last year to find outside investors to help fund fleet expansion.

"They have moved part-way down the track and are proceeding well toward completing the capital raising," Mr Inglis said yesterday.

He would not disclose how much capital was being raised.

A group of New Zealand individuals had come on board through a single investment vehicle.

"We are ideally looking for two to three investors to fill the capital needs," Mr Inglis said. "We certainly were hoping to raise our target figures to allow us to carry out our expansion without going past three organisations."

The target of completing the capital raising by the end of March was on track, despite the sudden cancellation of Origin's code share and aircraft leasing arrangements with Qantas from March 1. The project was suspended while a new business plan was drawn up to take to investors, Mr Inglis said.

"That has taken a little longer and has had a bearing on the ability to push ahead with capital raising till we had that complete."

Origin has since set up agreements to carry passengers from several international airlines flying into Auckland, including KLM Royal Dutch Airlines, Malaysian Airlines and Korean Airlines.

An agreement with new budget trans-Tasman operator Pacific Blue was expected soon.

"Both airlines have said there appears to be a mutual benefit to working together," Mr Inglis said.

Pacific Blue will add a Wellington to Sydney flight to its schedule tomorrow. It already flies from its Christchurch base to Brisbane.

Mr Inglis said he expected the new airline agreements to more than replace passengers lost from Qantas.

"They have to mature and come to fruition. I would imagine they would surpass the business that we have had from Qantas, but some of them may take a little time to develop."

He would not say if the fleet expansion would include a move into jets.

"Our core business is our services to the regions and our freight business, and that is certainly what we are focusing on."

[riskandreturn]

I think you're right on the mark seti....i think there's no chance FRE would get approval to acquire NZ Post's operations...

Possibly just a play to try to delay the process and push up the price??

[Happy]

risk and return - if your focusing on regulatory approvals I think your mistaken, the sheer nature that DHL wants to come into the market would make it possible for FRE to buy the Post operation.

I think FRE is a great company and the potential for post and DHL to get together can only be positive in the medium/short term as at least FRE will have a competitor who is keen to try and increase prices.

[willy_wonker]

It makes more sense for DHL to buy out FRE. Let NZ Post run their courier business to the ground by introducing some competitive pricing and services. How many government departments do you know that can turn a good profit for the company? DHL can reduce cost and increase revenue by using their existing global services and structure management. FRE/DHL merger/takover can also move into other existing mailing business currently run by NZ Post.

[willy_wonker]

Just noticed that the man himself Dean Bracewell have paid for his shares to increase his holdings.

Number of Securities Acquired: 877,392 ordinary shares converted from unpaid to fully paid.

He currently holds over 2 million shares.

[riskandreturn]

Happy - I disagree with your assumption that DHL wanting to enter the market would allow the purchase to take place.

It's comparable to Virgin wanting to enter the market here but the rejection of the alliance bid by Air NZ....

I dare say that DHL's first argument would be that they wouldn't be willing to enter a market with an effective monopoly in place.