Takeover Offer for Tourism Holdings

Monday 30 April 2007

Takeover Offer for Tourism Holdings to Create One of Australasia’s Largest Leisure Businesses

Leisure business owner MFS Living and Leisure Group announces cash offer for Tourism Holdings Limited

HIGHLIGHTS

- MFS Living and Leisure Group (ASX: MPY) announced an NZ$277 million cash offer for Tourism Holdings Limited (NZX: THL) on the ASX today

- The THL Board intends to recommend the offer in the absence of a future superior offer and subject to an independent expert report

- The acquisition will create one of Australasia’s largest leisure operators

- The acquisition will have strong benefits for New Zealand tourism from capital investment and growth initiatives in Tourism Holdings’ leisure attractions

- For MFS Living and Leisure investors, the combined entity has strong potential for revenue growth plus increased portfolio diversification giving greater certainty and consistency over future MFS Living and Leisure distributions

- MFS Living and Leisure intends to apply for an overseas listing on the NZX following the acquisition.

Diversified Australian leisure operator MFS Living and Leisure Group (ASX: MPY) today announced a cash offer of NZ$2.80 per share for Tourism Holdings Limited (NZX: THL) to create one of Australasia’s largest leisure owner and operators.

This cash offer is a premium of 29% over the 5 trading day volume weighted average price.

The THL Board intends to recommend the proposed NZ$277 million takeover offer in the absence of a future superior offer and subject to an independent expert report.

Both THL and MFS Living and Leisure own and operate substantial leisure operations with a mix of natural attractions and services.

While THL is New Zealand’s leading owner and operator of tourism and leisure attractions, MFS Living and Leisure is a worldwide diversified leisure business owner and operator with attractions in Australia, Korea, Thailand and China, and future aquarium development opportunities in Toronto, Seoul and Prague.

In Australia, the MFS Living and Leisure Group operates aquariums, ski-fields and tree-top walks.

THL’s leisure hire services include a motor-home fleet, half of which operates in Australia.

MFS Living and Leisure Group Chief Executive Officer Marshall Vann said the combined operations of the two companies would create a strong growth platform across Australasia.

“THL has an excellent portfolio of New Zealand assets and a quality management team led by chief executive Trevor Hall. From this platform we intend to grow the business and generate benefits for New Zealand tourism.

“We believe that with our networks, expertise and proposed capital investment programme, we can grow THL’s iconic businesses,” Mr Vann said today. “There are synergies between our Australian businesses and THL’s New Zealand operations that we will capitalise on.”

Overview of the proposal

Under the terms of the Offer, MFS Living and Leisure will offer NZ$2.80 per share for all of THL’s 98,180,723 shares.

An offer is also being made for a small number of Redeemable Preference shares on issue at the same effective price.

The Offer represents a 29% premium to the 5 trading day volume weighted average price.

The transaction is subject to approval by the New Zealand Overseas Investment Office (OIO) and to 90% THL shareholder acceptance.

Completion of the transaction is targeted for September 2007 although this is dependent upon completion of the New Zealand OIO approval process.

Funding for the proposed transaction has been committed through an equity raising underwritten by Macquarie Equity Capital Markets and debt funding from the Bank of Scotland.

Assuming the proposed transaction proceeds, MFS Living and Leisure intends to apply for an overseas listing on the New Zealand Stock Exchange to enable New Zealand investors to buy and sell MFS Living and Leisure securities through the NZX.

Transaction rationale

Mr Vann said MFS Living and Leisure intends to expand the New Zealand-based businesses through strategic capital investment and a number of other growth initiatives.

“MFS Living and Leisure will implement a sensible capital investment programme in New Zealand to upgrade many of the THL attractions,” he said.

MFS Living and Leisure’s present intention is to retain all THL staff, totalling 867 in New Zealand and 189 in international offices to enable the business to continue to grow. [THL Business Plan]

Mr Vann said the transaction would expand the range of attractions and create a substantial combined distribution network, increasing marketing opportunities.

“By cross-selling programmes that cover our Australian and Asian businesses and implementing a strategic future capital investment programme, we believe we can help boost visitor numbers to New Zealand and help grow the country’s number one export industry.”

Mr Vann said the transaction supported MFS Living and Leisure’s growth strategy to expand the business through acquisitions and organic growth.

“We are focused on buying or developing leisure businesses with steady income streams, high entry barriers in stable or emerging economies, and where there is a large middle class and established tourism industry.”

Mr Vann also said the proposed transaction would diversify MFS Living and Leisure’s earnings across a wider range of assets, countries and tourism seasons.

“The peak season for THL is the southern hemisphere summer, while for the majority of MFS Living and Leisure’s assets it is the southern hemisphere winter. Our earnings base will be diversified across tourist seasons, countries and attractions, providing more balanced future distributions over a year.”

This acquisition bid is the latest move by MFS Living and Leisure to broaden its leisure industry products.

Recently, the Group acquired the rights to develop and operate tree-top walks through its purchase of the Otway Fly tree-top walk in Victoria. MFS Living and Leisure is now developing a second tree-top walk at Illawarra in New South Wales.

In March 2007, MFS Living and Leisure announced a A$20.6 million expansion of its Melbourne Aquarium to incorporate a world-class Antarctic penguin exhibit, to open March 2008.

Also in March, MFS Living and Leisure announced the release of a loyalty programme allowing its security holders to experience the Group’s ski, aquarium and tree-top walkway attractions at discount rates.

In April, the Group announced the finalisation of its acquisition of the Northbank Place site in Melbourne’s CBD to be developed into a three-tower, mixed use project with an expected end value of approximately A$200 million. This development will be undertaken in a joint venture with property developer Far East Consortium, a subsidiary of the Hong Kong-listed Far East Consortium. While property developments are not considered central to the business of MPY, the Group is always seeking opportunities through its leisure acquisitions to expand its core leisure offerings through such synergistic property projects in joint venture with experienced developers.

MFS Living and Leisure reported a strong EBITDA result for the six months ended
31 December 2006 of A$28.6 million and a A7 cents distribution paid to security holders on 18 April 2007. MFS Living and Leisure has confirmed its full year distribution of A10 cents per security for FY 07.

About MFS Living and Leisure Group

MFS Living and Leisure Group is a stapled group comprising MFS Living and Leisure Trust and MFS Living and Leisure Limited and is listed on the Australian Stock Exchange (ASX:MPY).

MFS Living and Leisure operates in the leisure industry, through Australian Alpine Enterprises Holdings Pty Ltd (‘AAE’) and the Oceanis Group (‘Oceanis’).

MFS Living and Leisure is a worldwide diversified leisure business owner and operator committed to delivering naturally inspiring experiences. The group’s attractions comprise aquariums, ski fields and tree top walks.

ENDS

MFS Living and Leisure operates its aquarium assets through its business, Oceanis. The Group’s assets include Melbourne Aquarium and UnderWater World (Mooloolaba) in Australia, Siam Ocean World in Bangkok Thailand, Busan Aquarium in Korea and Shanghai Ocean Aquarium in China.

MFS Living and Leisure’s ski resorts are operated through AAE and comprise Hotham and Falls Creek in Victoria, Australia. The resorts collectively account for approximately 26% of the Australian skier market (by number of skier days).

Recently, the Group acquired the rights to develop and operate tree-top walkways in Australia, through its purchase of the Otway Fly tree-top walk in Victoria. MFS Living and Leisure is currently developing a second tree-top walk at Illawarra in New South Wales.

Further diversifying the Group’s operations, MFS Living and Leisure recently finalised the acquisition of the Northbank Place site in Melbourne’s CBD. MFS Living and Leisure purchased this site through its transaction to acquire the Oceanis Group in 2006.

MFS Living and Leisure plans to develop the site into a three-tower, mixed use project with an expected end value of approximately A$200 million, in a joint venture with property developer Far East Consortium (a subsidiary of the Hong Kong-listed Far East Consortium). While property developments are not considered central to the business of MPY, the Group is always seeking opportunities to expand its core leisure offerings through such synergistic property projects in joint venture with experienced developers.

MFS Living and Leisure is focused on buying or developing leisure businesses with steady income streams and high entry barriers in stable or emerging economies, and where there is a large middle class and established tourism industry.

Market cap AUD $175 million

Shares on issue 180,000,000

First listed 14 May 1999

Current share price AUD $0.97 (closing price as at 27/04/07)

About Tourism Holdings Limited

Tourism Holdings Limited (NZX: THL) is a leading owner and operator of New Zealand’s tourism and leisure attractions. THL’s attractions span leisure hire services, holiday packaging and a comprehensive portfolio of tourism and leisure attractions located on the North and South islands.

THL’s portfolio of tourism and leisure assets in New Zealand is operated through its Tourism Leisure Group and includes the following iconic attractions:

* Fullers Bay of Islands

* Awesome Adventures

* Kelly Tarlton’s Antarctic Encounter and Underwater World

* Waitomo Glow worm Caves including Aranui Cave and Ruakuri Caves

* The Legendary Black Water Rafting Co.

* Milford Sound Red Boats

* Milford Deep Underwater Observatory

* Johnston’s Coachlines including Ski Shuttle

* Great Sights, including Discover New Zealand retail.

THL’s Leisure Hire division operates assets in Australia and New Zealand under the Maui, Britz, Skiwi and Backpacker brands, while CI Munro manufactures motor homes and camper vans for the tourism markets in both countries, primarily servicing the needs of its internal businesses.

THL’s KX Group operates in New Zealand and Fiji, providing nation-wide coach and charter services including Airbus, Kiwi and FeeJee Experience and Tourist Transport Fiji.

Market cap NZ $222 million

Shares on issue 98,180,723

First listed 3 June 1986

Current share price NZ $2.27 (closing share price as at 27/4/07)

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