Why THL Rejected BGH’s $2.30 Offer and What It Means for Investors
Tourism Holdings Limited has dismissed a $2.30 per share acquisition offer from a BGH-led consortium, reaffirming its FY25 underlying profit expectations despite anticipating a statutory loss due to significant impairments.
- THL rejects non-binding $2.30 per share offer from BGH Capital consortium
- Board values company well above $3.00 per share, citing undervaluation
- FY25 underlying NPAT expected at lower end of $27M–$34.4M analyst range
- Statutory NPAT likely to show loss due to $36M goodwill impairment and deferred tax write-offs
- Board remains open to improved offers and ongoing shareholder engagement
Board Rejects Undervalued Acquisition Proposal
Tourism Holdings Limited (THL), the global leader in recreational vehicle rentals and tourism services, has formally rejected a non-binding indicative offer from a consortium led by BGH Capital and the Trouchet family. The consortium proposed acquiring THL at $2.30 per share, a price the Board considers opportunistic and significantly undervalued.
After engaging expert financial and legal advisers and consulting with key institutional shareholders, THL’s Board reaffirmed its conviction that the company’s intrinsic value exceeds $3.00 per share. The Board attributes the low offer price to a bottom-of-the-cycle trading environment that does not reflect the company’s strategic progress or asset base.
FY25 Earnings Outlook – Underlying Profit Steady, Statutory Loss Expected
Alongside the acquisition update, THL confirmed its underlying net profit after tax (NPAT) guidance for the 2025 financial year remains at the lower end of analyst expectations, between $27 million and $34.4 million. This aligns with the company’s July announcement and reflects ongoing operational performance despite challenging global economic conditions.
However, THL anticipates a statutory net loss for FY25, primarily driven by a potential goodwill impairment of up to $36 million related to its US operations, deferred tax write-offs in the US and UK amounting to up to $21 million, and other one-off non-cash items. These accounting adjustments underscore the complexities of THL’s international footprint but do not diminish the Board’s confidence in the company’s long-term prospects.
Strategic Position and Shareholder Engagement
The Board’s rejection of the current offer does not close the door on future discussions. It remains open to engagement with the consortium or other potential bidders should a significantly improved proposal emerge. Meanwhile, THL continues to advance its strategic initiatives, including expanding its rental brands across New Zealand, Australia, North America, and Europe, as well as growing its tourism attractions and travel technology segments.
Chair Cathy Quinn emphasized the Board’s commitment to acting in shareholders’ best interests, balancing valuation considerations with the execution risks inherent in THL’s growth roadmap. The company’s diverse portfolio, including well-known brands like Maui, Britz, and Road Bear RV, positions it well to capitalize on the recovering global tourism market.
Looking Ahead
As THL finalizes its FY25 financial statements and tax calculations, investors will be watching closely for how the statutory loss impacts market sentiment and share price. The Board’s firm stance on valuation and openness to improved offers suggest a dynamic period ahead, with potential implications for THL’s capital structure and strategic direction.
Bottom Line?
THL’s firm valuation stance and FY25 profit confirmation set the stage for a pivotal shareholder dialogue and market response.
Questions in the middle?
- Will the BGH consortium return with a higher, more acceptable offer?
- How will the statutory loss affect THL’s share price and investor confidence?
- What strategic moves will THL pursue to unlock value in underperforming assets?
