Express division could sell before parent Toll Holdings

Japan Post president Toru Takahashi at the announcement of the merger with Toll Holdings in 2015. Picture: Jeremy Piper

Parties lining up to take a look at Toll Holdings are expected to receive sales documents within a week, according to sources.

However, some in the market believe the Australian logistics group that is owned by Japan Post will first move to divest its Express division before selling the other more attractive parts of the company.

Toll Express provides services delivering documents and parcels within two days trans-Tasman and four days worldwide.

However, it has faced major challenges despite a higher volume of parcel deliveries amid the pandemic.

The Express division booked $57m of losses for the third quarter of the 2020 financial year then slid further into the red in the fourth quarter, with the loss increasing to $99m.

Market analysts suspect that despite higher volume, Toll was unable to pass on costs of deliveries linked to COVID-19.

Some maintain that Australia Post is the most logical buyer for the business.

Australia Post already owns freight and logistics company StarTrack, which competes with Toll Express and a deal may face opposition from the Australian Competition & Consumer Commission.

Other suitors are expected to be turnaround-focused private equity companies such as Anchorage Capital Partners.

Anchorage is keen to buy the Australian division of rental car business Hertz Australia, although the parent company, which this year filed for Chapter 11 bankruptcy, is yet to determine whether it will place the division up for sale.

Japan Post is listed, but the government remains the major shareholder and it has placed Toll Holdings up for sale after writing off more than $4.8bn of the value.

Working on the sale are investment banks JPMorgan and Nomura.