NZ Post-DHL link annoys other rivals

State-owned New Zealand Post has spurned rivals to sell its courier businesses into a joint venture with Deutsche Post-owned DHL.

The sale was condemned as a partial privatisation of a state business without a contestable process to find out if anyone else wanted to pay more.

FREIGHT: Courier joint venture sealed without tenders

New Zealand-owned Freightways was annoyed that it did not get a look in despite asking for the chance several times.

Also excluded was Toll Holdings of Australia, which has started a small courier business in New Zealand to exploit cross-selling opportunities from its road and rail businesses.

“We just wanted a level playing field,” said Dean Bracewell, managing director of Freightways.

He condemned yesterday’s deal as lacking transparency _ no financial details were disclosed.

Toll chief financial officer Neil Chatfield said the company was disappointed it did not get an opportunity to be involved.

He said it was a strange way to sell a public asset.

Rivals have no idea what NZ Post’s courier business is worth because no accounts have been published.

NZ Post is selling shares in holding company Express Couriers, which owns Courier Post, Pace!, SkyRoad and Contract Logistics, to DHL to set up a 50/50 joint venture.

The price, a multiple of the earnings in the June 2005 year, will be disclosed when finally set.

Freightways estimates the business has just over 40 per cent of the New Zealand express package market but until recently was not turning a profit.

Freightways, which has a similar market share and runs the NZ Couriers, Castle Parcel and Post Haste brands, earned $6.5 million last year.

Yesterday, it had a market capitalisation of $380 million. Its shares have risen to $3.10 from the $1.60 paid by investors when the company floated in September last year.

NZ Post chief executive John Allen cautioned against valuation comparisons with Freightways.

He said Express Couriers was a hard business to value. It had faced challenges but was now profitable.

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