‘Opportunistic’: What analysts say about the Tourism Holdings offer

Tuesday, 17 June 2025

The bid to buy listed tourism operator Tourism Holdings (THL) is not surprising, but a successful takeover is by no means a given, analysts say.

On Monday THL announced on the NZX that it has received an unsolicited offer for 100% of the company which values it at $508.5 million, representing a significant premium to its current market value of $323m.

The offer came from a special purpose vehicle composed of Melbourne-based private equity BGH Capital, and the family interests of Australian entrepreneurs Luke and Karl Trouchet.

BGH already holds 19.99% of the company, with a part of that shareholding comprised of shares it bought recently from local institutional shareholders ACC and ANZ New Zealand.

The all-cash offer for THL is subject to certain conditions including completing due diligence, finalisation of debt arrangements, and BGH receiving internal approval to submit a binding proposal.

But the consortium is also open to a deal that sees it take a controlling interest in the company, rather than owning it 100% outright, it said.

Craigs Investment Partners senior analyst Mohandeep Singh said the takeover offer was not surprising, given where THL’s share price had peaked in the last five years and where it had been trading recently.

The share price had dropped from the lofty peaks of more than $4 a year or so ago to $1.40 recently, although much of that was out of the control of the management and board, he said.

THL has been caught in the crossfire of the retaliatory tariff trade war unleashed by United States President Donald Trump’s administration.

The company is the world's largest commercial RV rental operator, and has significant interests in both the US and the Canadian markets.

Since the US announced worldwide tariffs on April 2, THL has issued several notices to the NZX acknowledging the tariffs and potential challenges it was facing.

It had also said the tourism industry saw a decline in interest in travel to the US this year, and that had resulted in a slowdown in international booking intakes for the upcoming peak season.

Singh said the offer was a bit opportunistic, but BGH had some form in this part of the world as it acquired Pushpay with Sixth Street Partners in 2023.

BGH’s offer of $2.30 was roughly a 60% premium on where the share price had been trading at, and it was a chunky offer at the higher end of the takeover premium range, he said.

“It reflects the fact the company’s shares are under pressure, but with an acquisition you can be a bit cheeky or you can offer a reasonable price to entice shareholders.

“And shareholders will look at the $1.46 price this morning, and take note they are now being offered $2.30 if the acquisition goes ahead.”

Singh said human behaviour would also come into it, and if people saw the big players such as ACC and ANZ had sold shares at the price being offered, it was likely to make the consortium’s sale pitch easier.

“It puts pressure on the independents on the board, and makes it harder to say they don’t think the offer is appropriate when some of the bigger players clearly do think it is a reasonable offer.”

Forsyth Barr head of research Andy Bowley said the takeover bid reflected a beaten up share price, which was due to the conditions the company was currently trading in.

But the board had to review the offer, and a takeover was not a fait accompli as the offer was at a very conditional stage, he said.

“The board has to unanimously recommend a sale, or you would want the board to recommend it because you don’t want it to get hostile.”

In his view, the chance of the board recommending it was low because the value of the offering did not reflect the value of the business more broadly ‒ despite the current conditions.

“I think the board will not recommend a sale at the share price being offered of $2.30, but if the offer increases, then maybe. It would be very interesting if it did.”

Bowley said interested parties would have to wait to hear back from the board over the next few weeks as to whether they would recommend a deal.

“Or whether there are discussions going on with the consortium, or if there is a different bid that emerges ‒ because there are a lot of permutations that can happen at these times.”

THL shares gained almost 58% on the news of the takeover, finishing the day at $2.30 ‒ close to the proposed takeover price ‒ with $49m worth of shares changing hands.

Off the board

Both Singh and Bowley commented on the fact that if the sale went ahead it would mean another New Zealand company would be leaving the NZX.

Singh said that since 2016 more than 20 companies had left the NZX due to takeovers, which meant a couple a year were getting picked off.

It was not unusual to see that type of activity, and there were often takeover bids during periods which had been tough economically, he said.

“Particularly with companies in very cyclical industries, such as construction, tourism and retail. Now, New Zealand’s economy is showing signs of stability, so it’s a good time to buy a bargain.”

Bowley said it was fair to say that more companies had left the NZX recently than had joined it, as there had not been many IPOs in recent times.

“It’s not great in terms of contributing to New Zealand’s capital market, but it is not inconsistent with what has been happening globally.”