Gullivers bid unlikely to climb

Queensland travel company S8 has formalised its bid for Gullivers Travel Group, with little expectation that the offer will be increased.

The offer document from ASX-listed S8 was sent out to shareholders late on Friday detailing the offer of $2.35 a share and 80c an option.

Gullivers shares closed flat yesterday at $2.36.

The $2.35 offer price represented a 40 per cent premium to the closing share price of $1.67 on May 26 - the last trading day before S8 said it would make a takeover bid.

First NZ Capital research analyst Jason Familton said the fact that shares were trading at roughly the offer price was an indication of investor thinking.

"The market tends to price in a premium if it believes a higher bid will come in - that's not happening," Familton said.

"Unless the independent valuation report comes back with some significantly higher valuation I can't see it [a higher offer] happening myself."

S8 managing director Chris Scott has said speculative share buying in the hope of a higher offer would not make sense because the company didn't need to acquire all of Gullivers with 51 per cent enough for control.

"Obviously they'd like to get to 100 [per cent] ... but I imagine if they are some way short of that I can't see an increased offer coming."

S8 would probably reach its conditional 50 per cent approval target quite quickly, Familton added.

Hedge funds had bought into Gullivers to take advantage of a special 5c a share dividend payable should the takeover go unconditional "and the quicker they can get their returns out the higher the return they'll get".

Gullivers managing director Andrew Bagnall, who will be offered a seat on the S8 board after the takeover, has already agreed to sell his 26.82 per cent stake.

The offer closes on September 10.