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Guardian Trust Funds Management To Hold Tranz Rail Shares

Wednesday 15th October 2003

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Statement made by Rickey Ward, Joint Domestic Equity Manager, Guardian Trust Funds Management

Guardian Trust Funds Management will not be accepting Toll Holdings offer of $1.10 a share for our holding in Tranz Rail of approximately 3% as the offer simply transfers wealth from our investors to Toll's shareholders.

Our first responsibility is to our investors, and we have always held the view that the offer of $1.10 a share is far too low.

Obviously there is a strong body of shareholders who hold similar views to ours as 17% of Tranz Rail's shareholders are saying "no thank you".

We have no doubts at all that Toll will turn Tranz Rail around, as they have an excellent record of creating wealth from under performing companies. Remaining an investor in Tranz Rail in the medium term will be good for our investors as they will share in the value created by Toll.

We are not convinced that Toll will be restricted from making the changes they deem necessary by remaining a listed company on the New Zealand Exchange.

The real beneficiaries of Toll delisting Tranz Rail will be Toll's shareholders, and Guardian Trust Funds Management is not prepared to put their interests ahead of the interests of its own investors.

Our preferred position is to remain a medium term holder of Tranz Rail shares, and provided sufficient shareholders are of a similar view, will continue to do so.

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