Apollo looking to merge with NZ tourism giant thl

Apollo looking to merge with NZ tourism giant thl

Campervan and motorhome business Apollo Tourism & Leisure (ASX: ATL) has today announced it is looking to merge with New Zealand-based tourism giant Tourism Holdings (NZX: THL) which would see shareholders receive a serious premium.

As part of the proposed merger, the two would expand their respective global recreational vehicle networks, including the rental, sales, manufacturing and service of RVs, with ATL shareholders to own 25 per cent of the merged company on completion.

Under the proposed transaction, Apollo shareholders would receive one fully paid ordinary share in thl for every 3.68 share in Apollo.

ATL says this implies a value of $0.736 per share for Apollo shareholders, based on the closing price of thl shares on 9 December, representing a premium of 32.6 per cent over the closing price of Apollo shares on the same date.

Overall, this values Apollo at approximately $137 million which is around $34 million more than the company’s market capitalisation as of 9 December.

According to Apollo, the proposed transaction will give the combined group the financial strength to emerge faster from COVID-19, take advantage of near-term growth opportunities as borders reopen, and improve operational agility and resilience.

Thl, which listed on the NZX in 1986 and has a market capitalisation of NZ$430.6 million, has agreed to apply for a foreign exempt listing on the ASX as part of the deal.

Ultimately, thl and Apollo expect the merged entity to deliver an EBIT uplift of $16.2 million to $18.1 million per annum, and the two companies in total will own a fleet of approximately 7,000 vehicles.

The directors of Apollo said they considered the proposed transaction to be in the best interests of shareholders and have unanimously recommended the deal.

Karl Trouchet and Apollo managing director Luke Trouchet, members of the family which founded the company in 1985 and who currently hold approximately 53.4 per cent of ATL shares on issue, both said they intended to vote in favour of the scheme too.

“The two businesses have similar operations and like-minded cultures, and we both strongly believe in the potential of the global RV market. The proposed merger would give us a better platform to meet the ongoing impacts of COVID-19, continue to offer our guests the best combination of products, services and prices possible, and better leverage the re-opening of global travel,” Luke said.

“With a more diverse portfolio of brands, strong presences in the key RV travel markets and a more robust balance sheet, the combined business will be better able to capitalise on near-term growth opportunities as borders re-open and cross-border tourism begins to return to pre-pandemic levels.

“I am very much looking forward to joining the Board and executive of thl and am excited by the prospects of what the two companies can achieve together. Karl and I will have a substantial holding and intend to be long term shareholders of the Combined Group.”

While the deal still needs to be approved by regulators and shareholders, it is anticipated the proposed transaction will complete prior to the end of FY22.

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

How communications technology can raise the bar on customer service, employee experience
Partner Content
From capturing feedback early to providing messages with a higher rate of cut-through, ...
Advertisement

Related Stories

"Light at the end of the tunnel" for caravan and tourism operators Apollo and Camplify

"Light at the end of the tunnel" for caravan and tourism operators Apollo and Camplify

Green shoots are showing for caravan-focused travel companies Apoll...

Camplify in the fast lane ahead of ASX listing

Camplify in the fast lane ahead of ASX listing

In just under two weeks caravan-share platform Camplify will park...

Apollo the latest horse in the race for Tabcorp's wagering and media business

Apollo the latest horse in the race for Tabcorp's wagering and media business

US alternative asset management firm Apollo Management has taken ...

Apollo stalls on COVID-19 shutdowns, posts loss greater than market cap

Apollo stalls on COVID-19 shutdowns, posts loss greater than market cap

There are unlikely to be too many happy campers on the board of A...