Tourism Holdings’ A$137 million (NZ$146.9m) all-scrip offer for rival Apollo Tourism & Leisure is fair and reasonable to the Australian companies shareholders, according to an independent adviser’s report on the deal.
Apollo’s board has unanimously backed the deal, which will see NZX-listed Tourism Holdings buy the Australian rental campervan operator by issuing one share for every 3.68 Apollo shares. When the deal was struck in December, that valued the Apollo shares at 73.6 Australian cents apiece.
Independent adviser Grant Thornton valued Apollo’s shares at between 70.9 Australian cents and 85.9 cents apiece, or A$132m to A$159.8m, and said the scheme was “fair and reasonable” to Apollo shareholders.
The rival tourism companies have been under pressure since the covid-19 pandemic erupted in early 2020, forcing countries to close their borders and wiping out the flow of international visitors that each had relied on.
Tourism Holdings has responded by overhauling its business on the expectation that international tourists will account for a smaller proportion of its future business, and has exerted more control over its supply chain by buying out its partner in an RV manufacturing business.
The NZX-listed company today said it would report a loss of $4.4m in the six months ended Dec 31 when it formally lodges its first-half result on Friday. That’s near the bottom end of the $4m-to-$7m range it forecast in December, and included $2.1m of costs associated with the Apollo deal.
It also said revenue fell about $31m to $175m.
The Apollo deal now needs shareholder approval at a meeting on April 20 and court sign off after that.
If it goes ahead, Apollo shareholders will end up owning about 25% of the enlarged group. The Trouchet family, which founded and control the Australian firm, will own about 13.4%.
Existing Apollo directors Luke Trouchet, Sophie Mitchell and Robert Baker will join the Tourism Holdings board if the deal goes ahead. Grant Webster, Tourism Holdings chief executive, will also join the board as managing director.
Separately, Tourism Holdings said Thor Industries has indicated a willingness to buyout the NZX-listed company’s preference shares in Roadpass Digital, formerly the Togo joint venture between the firms, at a discount.
Tourism Holdings said it will probably start negotiating with Thor in the coming weeks. Those preference shares have been valued at US$20.1m (NZ$29.9m), according to the Grant Thornton report.
Tourism Holdings shares slipped 0.4% to $2.55 in early trading on the NZX, down from the $2.85 price they traded at before announcing the deal on Dec 10 last year.
