NZ Tourism Group shows confidence in Campervan Hire business with the aquisition of KEA Campers and United Campervans.
Shares in Tourism Holdings rose to a six-month high after the NZX-listed campervan rental company said it will acquire KEA Campers and United Campervans in a $69.5 million deal that will double its per-share earnings in 2014.
The stock rose about 14% to 65 cents, the highest since February 27. Shares in the Auckland-based company have shed about 3% this year and are rated "outperform" based on the consensus of three recommendations compiled by Reuters.
"The merger is the best response to the challenging realities of the New Zealand tourism market," chairman Keith Smith said on a conference call. "There is the potential for enhanced dividends, and its delivers enhanced return to shareholder value."
The deal is subject to 50% shareholder approval. A special general meeting will be held in mid-October, with the merger scheduled for completion on October 31.
Following the merger THL forecasts its operating profit to increase to $19.3 million in the June 2013 full year from $16.3 million a year earlier.?That includes acquisition and implementation costs of $1.7 million.
In 2014, the first full year after the merger, operating earnings are expected to rise to $28.8 million, while after-tax earnings per share are set to double to 13.3 cents a share.