MFS Living and Leisure angered by shortfall in bid

A report in NZ’s The Dominion Post says that spurned Australian suitor MFS Living and Leisure is criticising the actions of some of Tourism Holdings’ major shareholders after failing in its $277 million takeover bid for the New Zealand company.

MFS Living and Leisure confirmed yesterday that its bid of $2.80 a share, conditional on 90 per cent acceptance, had reached just 83 per cent by the time it closed at midnight on Saturday.

That leaves MFS Living and Leisure with just a 10 per cent stake in THL, picked up before the takeover bid.

THL shares fell as much as 11 per cent early yesterday before rallying a little but still closing down 20 cents at $2.50.

While the failure of the bid in theory leaves THL as it was, it is by no means certain that the company’s chief executive, Trevor Hall, will be carrying on beyond the immediate future.

“I’m not going to confirm anything,” he said yesterday.

MFS Living and Leisure chief executive Marshall Vann was yesterday ruing the way many of the larger shareholders left it late to accept the bid and he was unhappy with the way some shareholders had played their hands in what he said was an effort to get more money out of MFS Living and Leisure.

“I find it disappointing that many people were saying (the offer) was too cheap and then they all accepted.

“People playing games and trying to get more money have led to a lot of people not getting $2.80 a share.”

Key American institutional shareholders led by US fund manager Sterling Grace gave no indication which way they would go on the bid before first buying another 3 per cent of THL and then accepting in respect of their combined 19.93 per cent stake last Monday, July 16.

“No doubt the lateness of their acceptance made it harder for us to get over the line.“  “By accepting on the Monday of the final week – did it give everyone enough time to understand and make their own decisions?”

Mr Vann, who said the bid had cost his company over $1 million, was not prepared to rule out another offer.  “I don’t know.”  “We’ve just worked out where we got to so I’ve no feel for it all at the moment.”  “We might just say let’s get on with life.”

A brief statement from the THL board said directors would comment on the direction of the company when its annual result is announced on August 28. Tourism Holdings is involved in a broad range of tourism-related activities.  It owns attractions such as Waitomo Glowworm Caves and Kelly Tarlton, and operates motor home, campervan and rental car businesses and coach and charter firms.  THL had been attempting to sell its tourism leisure group, which includes such operations as the Waitomo Caves. An indicative offer of $140 million for this business from MFS Living and Leisure led to the bid for all of THL.

Chief executive Mr Hall said yesterday that the strategy he had put in place was sound – and one which had seen the price of the company rise from $1.50 to the point there was a bid at $2.80.

He was adamant the bid price was a good one and said the board had a duty to put it to the shareholders.  “Can you imagine the outcry if we did not put that price to shareholders?”

He would be going back to the board to confirm a strategy for the future, but he was non-committal about his own longer-term plans, saying he would “wait and see for a few weeks”.

Mr Hall’s name has been linked with the vacant CEO position at SkyCity Entertainment Group. Asked whether he had been contacted about this job, he said: “I can’t comment.”

Report by The Mole