The board of Tourism Holdings is likely to reject BGH Capital’s $470m-plus bid for Tourism Holdings, say analysts at Wilsons, as the market bets a higher offer is on its way.
The campervan distributor this week told the market the Melbourne-based private equity firm had bid for the business on June 15, offering $NZ2.30 per share cash ($2.14 approx.), valuing the business at about $473m.
The business, listed in New Zealand as well as Australia, closed at $NZ2.31 per share on the announcement of the news, which suggests investors are betting a higher offer is on its way.
The company sells, builds and rents recreational vehicles like campervans internationally with over 30 brands.
It comes just days after BGH Capital also bid for Webjet Group with a similar structure, with a rival interest from its tourism competitor Helloworld also emerging.
Market observers believe the bids show BGH, which owns SeaWorld owner Village Roadshow, is likely betting that the domestic tourism market has reached a low point after demand has been dampened by higher interest rates and a higher cost of living.
Some industry experts are also anticipating a resurgence in domestic tourism with the cost of travelling internationally increasing and with geopolitical tensions.
BGH together with Gary Weiss and his business interests, collected a 10.76 per cent holding in Webjet Group and put forward an 80c-a-share takeover bid that the UBS-advised company rejected with it valuing the business at $314m.
BGH intended to seek a controlling interest in the company and was open to some shareholders retaining an ongoing equity interest, with the potential for ongoing access to liquidity by retaining the company’s public listing, subject to appropriate tax and legal considerations.
Shares on Monday in Webjet closed at 87.5c with its market value at about $344m.
Some are betting BGH and Helloworld would ultimately join forces, but others say they are operating separately.
In the case of Tourism Holdings, BGH, controlled by ex Macquarie Capital head Robin Bishop and ex TPG Capital executives Ben Gray and Simon Harle, is bidding with the Trouchet family who are the company’s largest shareholders.
Luke Trouchet is an executive director of the business after it purchased his family founded rival, Apollo Tourism and Leisure, in 2022.
Tourism Holdings directors are assessing the offer.
Wilson analysts say while the offer is higher than the recent trading price, it is well below the midpoint of its range in 2024.
Wilsons said they saw a reasonable likelihood Tourism Holdings would conclude the offer price did not represent fair value and would instead continue to seek strategic initiatives to lift value.
It saw reasonable potential for an increase in the offer price and/or a competing offer.
BGH has bought 8.2 per cent of the company and the family interests of Luke and Karl Trouchet are 11.8 per cent, 19.99 per cent when combined.
Selling out were ANZ, which received $NZ2.30 per share, and Wilson Asset Management and ACC at $2.25 per share.
The deal is conditional on financing, due diligence and the price falling within the independent valuer’s range.
Tourism Holdings said the consortium is open to considering a structure in which it achieves a controlling interest but less than 100 per cent of the company.
The offer represents a 58 per cent premium to the last closing price.
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