Takeover bid shunts THL shares up 20%

By NZPA

Monday 30th April 2007

Shares in tourism operator Tourism Holdings Ltd have leaped 20% following a takeover bid from listed Australian tourism company MFS Living and Leisure Group.

The bid, which values THL at $277 million, 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% below the cash offer of $2.80 a share.

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% 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 unconditional.

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% is likely to accept the offer.

The group comprising Drake Associates, Sterling Grace Capital Management, Cabin Interiors and Aviation Services owns 17% 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.

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