Tourism Holdings rejects Aussie takeover bid as ‘opportunistic and undervalued’

Monday, 4 August 2025

Tourism Holdings has a plan to get back onto a more sustainable path.

NZX-listed Tourism Holdings has rejected a bid for the company by Australian industry players as “opportunistic and undervalued”.

And it says while it will make a loss this year, it is at an “inflection point” and has a plan to get back onto a more sustainable path.

Longtime Tourism Holdings chief executive Grant Webster signed the announcement rejecting the Aussie offer for the company today.

In mid-June, an unsolicited, conditional, non-binding indication of interest came from a consortium comprising Melbourne-based BGH Capital and the family interests of Luke and Karl Trouchet to acquire Tourism Holdings for $2.30 per share.

The company’s board - minus Luke Trouchet, who is on the board but also bidding for the company - formed a committee to assess the proposal, which asked key institutional investors about it, before forming the opinion that the price offered “reflected a bottom-of-the-cycle trading environment and that this contributed to the timing of an opportunistic and undervalued offer for the company.

“Based on careful consideration and external analysis, the board has come to the view that the value of the company is well north of $3 per share,” it told the NZX this morning. The view is largely shared by the investment analyst community, based on a view that tourism - which is at about 90% of pre-Covid levels - will likely grow.

“Even allowing for significant downsides, and valuing currently underperforming parts of the group based on their underlying assets, the current BGH Proposal is well below a level that the board can engage with,” it said.

“The board has, therefore, formally communicated to the consortium that it rejects its current offer.”

It would consider a better offer if one came through, it said, from either the consortium or any other bidder.

Tourism Holdings will seek to understand why manufacturing in New Zealand is so much cheaper than in Australia, as part of its overall plan to become more profitable.

Tourism Holdings’ warned it would likely make a loss for the year given the potential impairment of USA goodwill of up to $36 million (up to $27m post-tax), a further $21m in potential deferred tax write-offs in the USA and the UK, and other non-cash one-offs.

Despite that outlook, the company released a presentation based on its belief that it had passed an “inflection point” and, “over the next few years, expects rental revenue to grow significantly, debt to reduce significantly, and its near-term cost reduction plan to be successfully implemented.”

Initiatives it would undertake to try and get itself into shape included a strategic review of the UK and Ireland division; a look at manufacturing costs across Australasia, which would consider why manufacturing in New Zealand is around 20% cheaper; a roll out of a plan to reduce capital employed and improve profitability in the Australian retail sales division, and its North American “synergy” project, which would see North America as one fleet from a procurement and sales perspective, improving the fleet economics of the region, rather than as separate Canadian and US fleets.

“[Tourism Holdings] believes that the combination of its growth drivers and strategic initiatives positions the company to achieve its goal of $100m in net profit after tax over the next three to four years”, it said, as long as it met key assumptions.

The company’s full year results will be reported on August 25.