Cullen paid $570 million over valuation

Duncan Bridgeman at NBR has written on the purchase of Dr Cullen’s train set:

Documents posted on the Treasury website reveal that in late 2006 officials valued the New Zealand’s rail system at $120 million, some $570 million less than the price the government paid for the business in July this year.

Yes we paid around six times the estimated value of the trains. My God.

The papers reveal that in December 2007, government agency ONTRACK made an indicative offer for equity held by Toll NZ of up to $350 million.

So Toll pushed Dr Cullen up from $350 million to $690 million. No wonder they call it the sale of the century.