In an effort to appease Australian and New Zealand regulator concerns over its proposed merger with Tourism Holdings (NSZ: THL), Apollo Tourism & Leisure (ASX: ATL) will divest a large portion of its motorhome rental fleet and its Star RV motorhome brand.
Though Apollo still insists that ATL’s proposed acquisition will not substantially lessen competition in Australia or New Zealand, the company is pushing ahead with planned divestments to conclude the clearance process “in a timely manner”.
In late-April, the Australian Competition and Consumer Commission (ACCC) announced it was concerned that the acquisition of Brisbane-based Apollo would “remove THL’s closest and largest competitor for motorised RV rentals in Australia”.
Announced in December last year, the proposed merger values Apollo at $137 million and would give the Australian campervan and motorhome business a 25 per cent holding in the combined entity.
“ATL and THL have commenced discussions with both the NZCC (New Zealand Commerce Commission) and ACCC to seek merger clearance on the basis that the merged entity will divest certain assets in each country,” Apollo said today.
The divestments include:
- A significant proportion of ATL’s 4-6 berth motorhome rental fleet in Australia and New Zealand, equating to 72 per cent of its NZ motorhomes and 80 per cent of its Australian motorhomes.
- Apollo’s premium Star RV motorhome brand
- A proportion of the forward bookings associated with the fleet sold
- Surplus property leases, on an as needed basis, based on the geographical footprint of a prospective purchaser.
THL has entered into exclusive negotiations with Next Capital to sell the proposed divestment assets to campervan and car hire company Juicy Rentals in New Zealand and Australia. Next Capital has a controlling interest in Juicy Rentals.
According to Apollo, the selloff is subject to both the ACCC and NZCC being satisfied that the divestments are acceptable. The deal is also subject to the completion of the proposed merger.
Apollo’s move comes alongside the NZCC announcing it will undertake a public consultation process in relation to the divestment proposal for the NZ fleet and will extent its timeframe for a decision on the merger to 2 August 2022.
Once the ACCC and NZCC approve the divestment proposal, Apollo will seek the approval of the Supreme Court of Queensland to update shareholders with a revised indicative timetable for the merger.
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