“P. and O. Less Interested In N.Z. Investment"

Press, Volume CX, Issue 32396, 8 September 1970, Page 16

“P. and O. Less Interested In N.Z. Investment"

(N.Z. Press Association —Copyright) SYDNEY, September 7. Tighter integration of Thomas Nationwide Transport, Ltd’s, Australian and New Zealand freight operations, and a move by P. and O. to concentrate its regional interests in Australia, emerged as the management concepts behind T.N.T.’s proposed move into the Union Steamship Company, the Australian “Financial Review” says.

T.N.T.’s managing director (Mr P. Abeles) said the planned purchase, of what would probably be a major shareholding in the Union Steamship Company, was part of T.N.T.’s strategy of strengthening its total involvement in all areas of its operations in Australia and New Zealand.

He stressed that details had not been worked out, and it would be “quite • a few ' months” before the final proposal was made. ! In London, a P. and O. (Spokesman said: “We can confirm the statement made in Wellington. T.N.T. took the initiative in approaching us land discussions are taking :place.” ! “P. and O. is waiting to see what proposals T.N.T. make. These discussions have no i implications for the P. and O. group’s investment policy |in Australia.” P. and 0. officials would not indicate whether the move had any implications for investment policy in New Zealand but there were indications in London that the group saw the T.N.T. offer as being an opportunity to concentrate its regional interests in Australia. Less Interest In N.Z. The group had already made it clear that it has an active policy of investing in Australia, it has not shown the same interest in New Zealand and its willingness to talk about the sale of the Union Steamship Company is believed to indicate a desire

to avoid diversifying too widely. P. and O. officials would not readily consider take-over proposals for any of their Australian-based interests — although their 20 per cent shareholding in Mayne Nickless would be negotiable. Mayne Nickless, Ltd, is “intrigued” by circumstances surrounding discussions between its first ranking shareholder, P. and 0., and the rival T.N.T., according to Mr Bruce Redpath. a director. No Confrontation Mr Redpath told the “Financial Review” at the week-end that the ramifications of P. and 0.-T.N.T negotiations would be discussed at the next board meeting. Mayne Nickless, he said, would hope to co-operate with, and not confront a T.N.T.owned shipping operation. A T.N.T.-Union link could strengthen the trading position of key transport groups, and the industry as a whole. Mayne Nickless hoped to lift its business in the shipping area and in doing so wanted to reserve forwarding space with all shipping groups.

A move by Mayne Nickless to take a direct interest in shipping companies should not be precluded. Mr Redpath said that Mayne Nfckless had not been aware that P. and O. was talking with T.N.T., and that

the negotiations had obviously been conducted in confidence, on T.N.T.’s initiative.

Self-Preservation

Mayne Nickless had not considered taking equity in shipping, and was devoting much of its expansion to antipollution and security projects. However, the group was interested in all forms of transport and would take “any and every action to preserve its business, including shipping.” Mr Redpath doubted if any T.N.T.-Union deal would adversely affect his group. Mayne Nickless’ links with the P. and O. group date back to 1963 when the company was appointed an official P. and O. baggage agent. The company later issued a 20 per cent share holding to P. and O.’s offshoot, P. and O. of Australia Pty, Ltd. The directors said that the close association of the two groups in the fields of goods transport would be to their mutual advantage. While it seems as though P. and O. has no rigid policy of holding on to its shareholding in Mayne Nickless, it also appears that T.N.T. would nol be interested in buying the P. and O. stake in the company.

Mr Abeles said the possibility of T.N.T. buying P. and O.’s holding in Mayne Nickless had not been discussed, either with P. and O. or at T.N.T.’s board meetings. He did not think T.N.T. would like to have a holding in its main competitor.

No Basic Change In London, Saturday’s “Financial Times” contained the following P. and O. comment on the T.N.T.-Union deal: “A P. and O. spokesman emphasised yesterday that the discussions did not indicate any basic change in the group’s philosophy of remaining primarily a shipping and transport group. “The approach has been made by T.N.T., which has been having a look at Union Steam for some time. We don’t know yet what they are prepared to offer.” The “Financial Times” commented: “With secondhand ship prices now at very high levels, T.N.T. would have to pay a high price for a wellmaintained fleet, and P. and O. might find the cash welcome for its heavy commitments in the ‘Mainline’ containership routes and inland transport interests it is developing."