THL - Tourism Holdings

[Muse]

Proactive the right word here. Rather than just sitting around waiting. This line caught my eye
"Significant anticipated cost out synergies are expected to deliver a steady-state EBIT benefit of $17M to $19M per annum, and fleet rationalisation is expected to generate in excess of $40M of net debt benefit"

[winner69]

Quite a few on this thread said thl needed to takeover Apollo


Taken thl a while to get around to it .... but probably a bit cheaper now than 2 to 3 years ago

[winner69]

If thl share price stays about where it is now Apollo shareholders getting about 73 cents for their 55 cents shares

Should be happy with that .... a good get out of jail card and jeez they'll cream it in future when the new combined group profits soar

[winner69]

the Apollo view of the deal

https://cdn-api.markitdigital.com/ap...df02a206a39ff4

[winner69]

Good deal Jeremy? .... haven't heard from you for a while

[winner69]

Merger seems to be totally based on 'synergies' .... the presentation mentions it 38 times

When I was involved in M&A work I made myself and others read The Synergy Trap by Mark Sirower on a regular basis. Essentially retired from such things now but might pull my copy of the shelf and have another read.

Mergers based on synergies often don't add much value (or not to the extent originally estimated). Invariably synergies are over valued.

There's a saying often heard in the Board room ... 'Where did all the synergies go'

Be interesting how this pans out for thl

[Arbroath]

Merger seems to be totally based on 'synergies' .... the presentation mentions it 38 times

When I was involved in M&A work I made myself and others read The Synergy Trap by Mark Sirower on a regular basis. Essentially retired from such things now but might pull my copy of the shelf and have another read.

Mergers based on synergies often don't add much value (or not to the extent originally estimated). Invariably synergies are over valued.

There's a saying often heard in the Board room ... 'Where did all the synergies go'

Be interesting how this pans out for thl

Agree that is the main risk medium term but in this case both businesses are almost identical and there will be plenty of corporate and property costs they can eliminate over 2-3 years. If they can’t execute these synergies then it will make a good chapter in a book.

[winner69]

Agree that is the main risk medium term but in this case both businesses are almost identical and there will be plenty of corporate and property costs they can eliminate over 2-3 years. If they can’t execute these synergies then it will make a good chapter in a book.

At least the Apollo shareholders will get the synergy value up front.

[Southern Lad]

Interesting to compare the closing THL (NZ$3.02) and ATL (A$0.70) share prices today. Noting that the scheme if it progresses will deliver 1 THL share for every 3.680818 ATL shares and using a AUD:NZD midpoint of 0.9497, the effective THL purchase price via ATL is a bit over NZ$2.71.

The reasons why this large arbitrage exists are presumably:

1. Concern the transaction won’t proceed (whether regulatory or failure to get ATL shareholder support)
2. Australian ATL shareholders not wanting shares in a NZ company and therefore getting out of ATL
3. The material increase in the ATL share price today encouraging both traders and long suffering ATL shareholders to take the cash now.
4. The increase in the THL share price today not having dawned on ATL selling shareholders (this mornings announcements suggested an effective value of A$0.7358 per ATL share however this was based on a THL share price of NZ$2.85).

The ATL share price also suggests the market doesn’t anticipate a superior offer for ATL appearing.

Will be interesting to see how the two share prices track next week.

[nztx]

Dividend still on hold until at least 2023 .. while the rugs get shaken out & aired ?

Frankly any perceived Synergies values look better invested out of this troubled sector IMO