Break-up talk a tall story, says new chief
THE incoming chief executive at Toll Holdings, Brian Kruger, has poured cold water on speculation that the company could be broken up and sold to private equity interests. He has also played down investor fears of the freight and logistics company's exposure to the depressed retail market.
THE incoming chief executive at Toll Holdings, Brian Kruger, has poured cold water on speculation that the company could be broken up and sold to private equity interests. He has also played down investor fears of the freight and logistics company's exposure to the depressed retail market.The 49-year-old, who is now Toll's chief financial officer, was yesterday announced as the successor to the long-serving Paul Little, who will step down at the end of the year.Mr Kruger said he would focus on integrating parts within Toll's six divisions to work more closely and cross-sell to customers, rather than contemplate a break-up."The company is worth significantly more in the current structure than in a break-up," Mr Kruger told BusinessDay. "A lot of the customers we work with look for services that are provided by different parts of our business."Mr Kruger's appointment was widely expected but had concerned some in the investment community who had hoped for an external candidate to bring fresh ideas to the company after Mr Little's 26-year reign.But Mr Kruger, a former BHP Billiton and Bluescope Steel executive, pointed out that he had spent only two years at Toll and had a wide range of financial, operational and mergers and acquisitions experience.His appointment was met with ringing endorsement from the chairman of Wesfarmers and Boral, Bob Every, who first met him 16 years ago when both were at BHP.Mr Every, then BHP's chairman, said Mr Kruger demonstrated strong commercial acumen even at that young age, and had earmarked him as a future chief executive."I saw Brian as a young finance executive and really liked his style," Mr Every said. "He's hard but fair."Analysts have voiced concern over Toll's long-term strategy, including its large exposure to the weak retail sector."I think to some extent that's been overdone," Mr Kruger said. He said Toll's businesses had a much lower level of exposure to discretionary retailers than analysts thought, and that he would provide more details at the company's full-year results in three weeks.Mr Kruger also welcomed Mr Little's plans to return to the Toll board as a non-executive director after next year's annual meeting, despite widespread corporate governance concerns from investors.Mr Little has also stated his ambition to eventually become chairman of Toll."I think it's absolutely the right thing for us to not be losing his skills, knowledge and experience," said Mr Kruger, who will be paid $1.7 million a year, plus bonuses.Toll shares closed down 3? at $4.41.