Friday 19th October 2012
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Shareholders in rental campervan operator Tourism Holdings threw their weight behind a $69.5 million merger with rivals United Campervans and KEA Campers at a special meeting in Auckland today.
The cash-and-scrip deal got more than 90 percent approval and the new entity will be operating within a matter of weeks, chief executive Grant Webster told BusinessDesk after the meeting. With shareholders' approval, Tourism Holdings will complete the deal on Oct. 31.
The enlarged Tourism Holdings' market share of the rental caravan market will rise to 45 percent from 27 percent. The company has been looking at ways to squeeze more from its markets as international visitor numbers from Europe and the UK decline amid the global economic downturn, and as the New Zealand dollar's strength makes it a pricier destination.
"The world is what is it is - it's not how long it will take to turn around," Webster said. "The restructuring has got to be credible for this environment." Webster said the company needs to improve its return on equity in the current environment and can't simply bank on demand from UK and European visitors picking up.
The rental campervan operator's board unanimously recommended shareholders accept the deal, which independent advisers Cameron Partners said could add "material value" to both Tourism Holdings' investors and the KEA and United sellers.
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.
Webster said the company will focus on realising this merger before looking at any other bolt-on acquisitions as tourism sector faces further consolidation. The shares were unchanged at 74 cents, and have surged 30 percent since the deal was announced last month.
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