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The Australian Financial Review (AFR) reports:

Nothing’s been simple for Japan Post at Toll – so it’s fitting that its partial exit should also prove extremely complex.

Japan Post is trying to sell Toll’s global express unit, which accounts for 41 per cent of Toll Group’s revenue or $3.2 billion and includes express parcel delivery, domestic freight-forwarding and its New Zealand business.

First-round bids went to sale advisers JPMorgan and Nomura on December 23 and, after a round of discussions with various bidders, Street Talk understands a second and more detailed diligence phase launched this week.

There are a huge number of suitors in the data room.

There’s a handful of financial bidders for the whole global express unit, as well as trade parties for each of the unit’s sub-sectors (couriers and express parcels; palletised freight, intermodal and Tasmania/shipping; and NZ). There’s blood in the water and no one wants to miss out on a potential bargain, or the chance to snoop into a rival’s operations.

While it’s good to have heaps of interested parties, it’s created a headache for Japan Post, Toll management and others involved in the sale. Dealing with all the parties is a logistical nightmare, even for a logistics specialist.

Big biters

Bidders for the whole lot include Australia’s Anchorage Capital Group and Allegro Funds – who are probably the country’s best-known turnaround investors. The messier the situation, the more these two get interested.

Both are understood to be keen to refine Toll’s business and its portfolio, and clean it up for a new owner. Both are working alone.

Melbourne buyout firm BGH Capital and Sydney’s Pacific Equity Partners – purveyors of the biggest and second-biggest Australian buyout funds – are understood to have dropped out of the auction. Carlyle’s special situations group, Carlyle Strategic Partners, is another that is no longer involved, despite taking an early interest.

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