Railamerica Files Notice For Cash Takeover Offer To Acquire Tranz Rail Holdings Limited
RailAmerica, Inc. (NYSE: RRA), the world’s largest operator of short line and regional freight railroads, today
announced that its newly established subsidiary Rail New Zealand intends to commence a takeover offer for 100% of the
equity securities of Tranz Rail Holdings Limited (“Tranz Rail”) (NZSE: TRH.NZ).
Pursuant to its notice, Rail New Zealand intends to offer NZ$0.75 cash for each ordinary share of Tranz Rail (including
those represented by American Depositary Receipts). The offer is for all of the ordinary shares and all other equity
securities issued by Tranz Rail. The total offer value for the equity is approximately NZ$158 million. In addition, Rail
New Zealand will assume or refinance approximately NZ$236 million of Tranz Rail’s existing lease obligations and
indebtedness outstanding at December 31, 2002, net of cash. The offer represents a 65% premium to Tranz Rail’s last one
month’s volume weighted average price and a 44% premium to the closing price on May 14, 2003. RailAmerica intends to
seek lender consent under its existing credit facilities for the offer and to fund the offer through its existing credit
facilities and/or other sources. RailAmerica has retained UBS Warburg and Morgan Stanley to act as financial advisors in
connection with the offer.
“We believe the potential acquisition of Tranz Rail represents a significant opportunity for our shareholders,” said
Gary O. Marino, Chairman, President & CEO of RailAmerica.Tranz Rail is an important asset for New Zealand’s economy and transportation infrastructure. As we
have done in previous acquisitions, including our acquisition of Freight Australia, we believe we can significantly
improve customer service by implementing our customer-driven operating principles.”
In 1999, RailAmerica purchased Freight Australia. Since that time, RailAmerica has significantly enhanced Freight
Australia’s financial performance by increasing revenues, moving that subsidiary into profitability and improving
operational performance.
Consistent with New Zealand’s Takeover Code, no agreement or arrangement has been made, or is proposed to be made,
between RailAmerica or Rail New Zealand, and Tranz Rail in connection with the offer.
The offer is scheduled to commence in New Zealand between May 30, 2003 and June 14, 2003, and close at 5:00 p.m. New
Zealand time 30 days after the offer is circulated, unless extended. The offer will be conditional upon, among other
things, holders of Tranz Rail equity securities tendering 90% or more of the voting securities of Tranz Rail, Rail New
Zealand obtaining all necessary consents to complete the offer under the Overseas Investments Regulations of 1995, Tranz
Rail refraining from selling or agreeing to sell any businesses or assets outside the ordinary course of business, and
RailAmerica obtaining lender consent for required waivers and amendments to its existing credit facilities.
This announcement is not an offer to purchase with respect to any securities. The offer will be made solely pursuant to
an offer to purchase and related form of transfer (and solely with respect to the Tranz Rail American Depositary
Receipts, a Letter of Transmittal).
RailAmerica, Inc. (NYSE: RRA) is the world’s largest short line and regional railroad operator with 49 railroads
operating approximately 12,900 miles in the United States, Canada, Australia and Chile. In Australia and Argentina, an
additional 4,300 miles are operated under track access arrangements. The Company is a member of the Russell 2000Ò Index.
www.railamerica.com http://www.railamerica.com
Tranz Rail is a multi-modal freight transportation company providing both freight and passenger services in New Zealand.
Tranz Rail’s operating revenue for the year to June 30, 2002 was NZ$574 million.