There aren’t going to be many tears shed for Chris Corrigan and his gang at Patrick Corporation as rival transport group Toll Holdings bids for the company – least of all from a revenge-seeking Richard Branson. Here’s an early report on the proposed offer.

The whole point of the deal hinges on Toll’s ability to remove Virgin Blue and its volatile business model from the merged company, should it be successful.

To do that, Toll and its CEO, Paul Little, have capitalised on the ill-will between Corrigan and Branson that’s existed since Patrick bought into Virgin Blue several years ago. Corrigan set up a structure that allowed him to take his time making decisions: the longer Patrick took about the float, the less money Branson would receive. And that’s what happened.

Then when Patrick launched a bid for Virgin Blue at the end of 2004 (which ended up seeing its stake rise from 45% to just over 65% of Virgin), relations between Branson and Corrigan/Patrick were again strained, with Branson and his advisers actively trying to frustrate the bidders through a PR and legal campaign. A tough line against the airline management from Patrick and Corrigan also didn’t help relations as the management team in Brisbane at Virgin Blue were personally very close to Branson and the criticism reflected on him.

It’s now clear that Corrigan/Patrick paid too much to lift its stake: the surge in fuel prices has knocked upwards of $60-70 million off Virgin Blue’s profit for the year to September, and up to $27 million off the Patrick figure. That means Corrigan and Patrick have been exposed and Toll has pounced opportunistically.

Branson’s ire is such that he ignored what was clearly a good price at the time and what seems a great price (Patrick offered $1.90 a share for Virgin Blue and it reached a low of $1.63 last week). So he’s done a deal with Toll that will see his Virgin Group emerge with a stake of around 40.6% of Virgin Blue once one-off issues and share deals are done.

Branson already controls 25.6% of Virgin Blue and a special deal over 15% of the Patrick stake will see his ownership rise to 40%. Toll will keep around 10% for strategic reasons for 30 months (and keep Branson onside) while shareholders in Patrick will receive a distribution of Virgin Blue shares as part of the offer from Toll.

That’s really cute in itself. Patrick shareholders already own 62% of Virgin Blue and will now get that as part of the $6.70 in value offer from Toll.