Final dash to close THL deal?
A report in NZ’s The Dominion Post today says that Australian suitor MFS Living and Leisure (MPY) looks set to make a spectacular last-gasp dash to victory in its $277 million takeover bid for Tourism Holdings.
The bid, launched in late April and set to close on Saturday, had looked to be staggering, as several large institutional shareholders held out against the $2.80 a share price.
The offer needs 90% support or it will fail, however, the largest shareholders, a group of institutional investors led by United States fund manager Sterling Grace, gave the bid a massive shove yesterday by accepting in respect of their 19.99% stake.
In addition, the Accident Compensation Corporation accepted the offer for its 4.62% holding.
MPY now has acceptances for more than 50% of the THL shares and the key will be the attitude of AllianceBernstein, which holds 12.4% who should decide within the next 24 hours. It could block the takeover on its own, but might see such a move as risky.
MPY chief executive Marshall Vann could not be contacted yesterday and was believed to be travelling to New Zealand to oversee his company’s drive to get the bid over the line.
As the bid has struggled to gain traction, Mr Vann has made frequent statements to the NZX in an effort to get THL shareholders to accept the bid.
He has said the offer will not be raised or the closing date extended and that MPY will not bid for any parts of the THL business if its full takeover bid does not succeed.
Sterling Grace’s move to accept the takeover offer came after it had actually bought a further 3% of the THL shares on Thursday and Friday.
While this move perplexed some in the market, it was, with hindsight, clearly aimed at maximising profits for the Americans – THL shares have been changing hands on the market for a lot less than the $2.80 bid price.
THL shares closed down 1 cent at $2.69 yesterday.
Tourism Holdings is involved in a broad range of tourism-related activities, owning attractions such as Waitomo Glowworm Caves and Kelly Tarlton and operating motor home, campervan and rental car businesses, and coach and charter firms.
It has forecast a trading profit of between $17.5 million and $18.5 million for the year to June.
Report by The Mole
John Alwyn-Jones
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