A $32.3 million takeover offer to gain a controlling stake in campervan rental company Tourism Holdings Ltd prompted a more than 16% share spike yesterday.
Newly incorporated New Zealand-based investment company Ballylinch already has a 19.1% stake in Tourism Holdings, which it bought from United States-based Sterling Grace Capital Management for $17.2 million earlier this week.
Ballylinch has now offered 67.5c a share for up to a further 40.8% stake in Tourism Holdings, conditional on gaining 50% acceptances, which would cost a total $49.5 million if successful.
Tourism Holdings' shares rose more than 16% to 70c after the announcement yesterday.
Tourism Holdings chairman Keith Smith responded to the offer by suggesting to shareholders they do not sell until a formal evaluation of the offer was released.
Craigs Investment Partners broker Chris Timms was not surprised by the offer, as some of the private investors involved in Ballylinch were understood to have been Tourism Holdings shareholders since its inception.
"This [takeover] offer will give them the ability to get a couple of seats on the board ... they want to have some influence and obviously see plenty of potential for future investment," Mr Timms said.
Ballylinch spokesman John Grace said he had been a supporter of THL for many years.
"In these difficult times, [I] believe that a company as important as THL in an industry that is as important to New Zealand should have a stable cornerstone shareholder," he said in a statement.
In June 2008, Dunedin company Skeggs Group paid $17.3 million for the Milford Sound assets of Tourism Holdings, including its high-profile Red Boats passenger service.
The other Milford assets included five day-trip Milford Sound Red Boats, the Milford Deep Underwater Observatory, the Blue Duck Cafe and a 49% shareholding in infrastructure organisation Milford Sound Development Authority, which owns a stake in Milford Sound infrastructure assets.
Tourism Holdings provides holiday rental vehicles in Australia and New Zealand under the Maui, Britz, Backpacker and Explore More brands. Most of the vehicles are provided by its manufacturing company, CI Munro.
For the six months to December, Tourism Holdings reported a loss of $1.3 million, with revenue down 8% from a year earlier to $84.9 million.
It also reported a sharp fall in European bookings in January and February, saying it believed natural disasters in Australia, and reports about those events, had affected the perception of Australia and this country as travel destinations.
