KEY POINTS:
Listed Australian tourism company MFS Living and Leisure Group has launched a full takeover bid for New Zealand tourism operator Tourism Holdings Ltd that values THL at $277 million.
The bid is a cash offer of $2.80 a share and it is recommended by the board in the
absence of a higher offer.
If the bid is successful Tourism Holdings will be delisted from the New Zealand share market but MFS Living and Leisure will apply for an overseas listing on the NZX.
The board of THL said the takeover notice was in the name of Cloud New Zealand Pty Ltd (CNZ), a wholly owned subsidiary of MFS Living and Leisure Ltd.
"The board stresses that no action is required from shareholders at this stage."
The offer is conditional on the bidder getting 90 per cent of shares, the level at which further shares can be compulsorily acquired.
It is also conditional on Overseas Investment Office consent and the consents from Australian regulatory authorities and on "certain other matters relating to THL" and funding.
The notice of intention to bid follows talks about specific THL assets, THL said.
These negotiations led to an indication from MFS that it was inclined toward an offer for the whole business. The board then provided information requested to MFS.
THL has agreed not to solicit other offers and it gets a break fee of $3.5 million if the offer does not go unconditiona l.
The board is recommending the offer subject to no higher offer being made and the offer being within the fair value range in an independent appraisal report.
There was no immediate comment on whether a US-based group that has recently increased it stake in THL to 17 per cent is likely to accept the offer.
The group comprising Drake Associates, Sterling Grace Capital Management, Cabin Interiors and Aviation Services owns 17 per cent of the company.
Last week THL upgraded its profit outlook to $17.5m-$18.5m in its June year from a previous $15m-$18m range.
The company runs New Zealand's largest campervan fleet.
MFS said it intended to retain all of THL's 867 staff in New Zealand and 189 in international offices.
MFS operates aquariums, ski-fields and tree-top walks.
Shares in Tourism Holdings leapt 20 per cent following announcement of the takeover bid this morning.
The bid pushed the shares up 45c to a nearly seven-year high of $2.72 shortly after a trading halt was lifted.
The share price is currently 2.9 per cent below the cash offer of $2.80 a share.
- NZPA