Apollo’s merger with THL a step closer after agreeing to sell 80pc of fleet to Jucy

Apollo’s merger with THL a step closer after agreeing to sell 80pc of fleet to Jucy

Apollo Tourism & Leisure (ASX: ATL) and Tourism Holdings (NZX: THL) have bowed to demands from the competition watchdog over their planned merger by reaching a deal to offload some of Apollo’s newest vehicles to independent campervan hire company Jucy for NZ$45 million ($39.6 million).

Apollo has also agreed to sell its Star RV motorhome brand to Jucy, giving their competitor a bigger foothold in the Australian and New Zealand vehicle rental market.

The agreement is expected to allay competition concerns on both sides of the Tasman and pave the way for Apollo and Tourism Holdings to proceed with their planned merger which had initially valued Apollo at $137 million.

Earlier this month, the Australian Competition and Consumer Commission (ACCC) announced that Apollo and Tourism Holdings had offered a court-enforceable undertaking that would see Apollo sell about 80 per cent of the four to six-berth motorhomes in its Australian rental fleet – among them some of the company’s newest motorhomes - as well as the forward bookings secured on them.

Today, Apollo announced it would be selling 110 motorhomes in New Zealand and 200 in Australia to Jucy, along with a proportion of the forward bookings.  

In reaching the agreement, Jucy has agreed to buy 40 new motorhomes from the merged group in calendar 2023 with an option to buy another 40 in 2024.

Jucy also has requested that Apollo introduces the company to those Star RV wholesalers that currently market Apollo’s motorhomes and with which Jucy doesn’t have an existing relationship.

Apollo is also divesting the property leases for surplus rental depots in Auckland, Perth, Alice Springs, Darwin and Hobart.

Apollo’s CEO Luke Trouchet says the divestment is expected to be completed ahead of the planned merger with the New Zealand Commerce Commission set to hand down its decision today and the ACCC on 29 September 2022.

Meanwhile, amendments to the scheme of arrangement for the merger have been made to reflect changing values since the proposal was first announced in December last year.

Apollo shareholders were originally proposed to own 25 per cent of the merged company but now will own 27.5 per cent. The new merger ratio will see Apollo shareholders receive one ordinary share in Tourism Holdings for every 3.21 shares they hold in Apollo.

“The passage of time has had an impact on the relative value of each company’s assets since the original merger negotiation took place,” says Trouchet.

The new value takes into account the increase in value of Apollo’s Canadian properties and its Australian operations which he says have recovered faster than expected in post-COVID trading.

The Brisbane-based Apollo, which was established in 1985, manufactures, rents and sells a range of RVs including motorhomes, campervans and caravans. The company has operations in Australia, New Zealand, North America, Germany, the UK and Ireland.

Jucy was established in Auckland in 2001 with a fleet of just 35 rental cars and today operates an extensive rental network of cars and campervans across Australia and New Zealand.

Apart from competition approval, the merger remains subject to a green light from the Australian Foreign Investment Review Board.

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