Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Tourism Holdings’ $69.5M merger 'compelling', adviser says

Tourism Holdings’ $69.5M merger offers 'compelling' opportunities, independent adviser report says

By Paul McBeth

Sept. 28 (BusinessDesk) - Tourism Holdings’ $69.5 million merger with rivals United Campervans and KEA Campers offers "compelling" opportunities to cut costs, according to the independent adviser's report.

The rental campervan operator's board unanimously recommends shareholders sign off on the deal to grow its market share in a cash-and-scrip offer after independent advisers Cameron Partners declared the transaction could potentially add "material value" for both Tourism Holdings investors and the United and KEA sellers. The deal will lift Tourism Holdings' market share of the rental caravan market to 45 percent from its current 27 percent.

"We consider the strategic rationale for the transaction to be strong and the fleet rationalisation and synergy benefits to be achievable," the report said. "The strategic rationale to reduce over-sector capacity and to achieve potential cost synergies is compelling."

The company has been looking at ways to squeeze more from the market as international visitor numbers from Europe and the UK decline amid the global economic downturn, and as the New Zealand dollar's strength persist.

The shares fell 1.4 percent to 71 cents today, and have rallied 25 percent since the merger was announced earlier this month.

Tourism Holdings chairman Keith Smith said the company needs to cut costs and reduce fleet capacity in an "effective and timely manner" and that the discount on the targets doesn't often arise.

"Whilst the board remains confident in the long-term outlook for tourism, it recognises that there is little change of increasing tourist numbers to New Zealand from the core European and United Kingdom markets over the coming two years," Smith said.

The transaction if forecast to lift annual revenue to $241.3 million in 2014 from this year's $200 million, with profit rising to $14.8 million from this year's $4.5 million.

The deal needs 50 percent approval to get over the line, and shareholders will vote on the transaction at a special meeting in Auckland on Oct. 19.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Gita Hits NZ: 'It Was Literally Like A Wall Of Water'

"We were looking at the river at 80 cubic metres at about 4pm thinking it was amazing that we'd dodged the bullet ... an hour and a half later it was 600 cubic metres, and it just kept going up to 900 from there." More>>

ALSO:

America's Cup: Another Day, Another Cup Village Plan

A fourth option modelling what an America's Cup Village in Auckland might look like has arrived today as a planning deadline nears with no agreement in sight.More>>

Closing Or Selling Regionals: Fairfax Starts NZ Endgame

Fairfax Media Group will close or sell 35 percent of its New Zealand print titles as the Australian group pursues a digital strategy for the kiwi unit, now rebranded Stuff. More>>

Fletcher Building: Norris Steps Down As Chair After New $486M Loss Provision

Ralph Norris will step down as chairman of Fletcher Building after the company took a further $486 million provision for project losses at its Building + Interiors unit and said 14 of the unit's 73 projects, worth $2.3 billion, are loss-making or 'on watch'. More>>

ALSO:

WWF: Concerns With Suggestion To “Scrap” Fishing Monitoring

“Our Pacific neighbours, like Fiji and the Solomon Islands, are making this work with far less economic resources than New Zealand. There’s no reason the government can’t get this done by October.” More>>

ALSO:

Stink one!: Stink Bug Invasion Could Cost NZ Billions

An invasion of the brown marmorated stink bug - the pest discovered recently in three Japanese car shipments - would devastate New Zealand's fruit, vegetable and wine industries, destroying more than $4 billion of export value and costing thousands ... More>>