Allegro enlists McGrath Nicol as contest for Toll’s Global Express nears sharp end

Allegro Funds founding partner Chester Moynihan.

Allegro Funds Management is understood to have tapped McGrath Nicol as its adviser in the competition to buy the Global Express unit of Toll Holdings.

Working on the sales process, which is now in the second round, is JPMorgan and Nomura.

The understanding is that Allegro is bidding for the entire unit.

Its plan, once under its ownership, say sources, involves breaking up the operation, potentially placing some parts into administration and ridding itself of challenging leases.

Allegro has a track record of taking on difficult operations and when it purchased the Australian general merchandise division from the cash-strapped Steinhoff International in 2019, it controversially placed the Harris Scarfe division into administration only weeks after the deal.

Harris Scarfe was later sold to the Spotlight Group.

The Sydney-based buyout fund that focuses on turnaround situations is also embarking on an initial public offering of The Best & Less Group that it secured from that Steinhoff acquisition.

Selling apparel and homewares, its brands include Best & Less and Postie in New Zealand.

There is a growing view that Platinum Equity is in the second round of the contest with Allegro, with final bids due by about the end of March.

Qube Holdings was in the early stages of the contest, thought to be bidding for the unit’s domestic warehousing network.

However, Qube told investors at its results presentation last week that it had been knocked out of the race.

The Global Express division consists of three components — Express Parcels, the Toll freight shipping operations to Tasmania and an intermodal operation.

Toll’s preference is to sell the division in one line, but the company has faced major challenges of late and has been losing money.

Japan Post outlaid $6.5bn for the operation in 2015 before later booking a $4.8bn writedown.