Milford becomes biggest shareholder in Tourism Holdings after Sterling Grace exits
Milford Asset Management [NZX: THL] has become the largest single shareholder in Tourism Holdings after investor Sterling Grace exited its holding in the rental campervan operator.
Auckland-based Milford raised its stake to 17.8% from 13.8%, after paying $2.55 a share for the stock on Thursday, according to a substantial shareholder notice to the NZX on Friday. Brokerage Forsyth Barr handled the trade of Sterling Grace's shareholding, which had stood at 17% according to its last disclosure in January. The stock last traded at $2.68, valuing Milford's stake at about $55 million.
Tourism Holdings shares have advanced 22% this year, outpacing a 7.6% gain in the broad S&P NZX All Index, as its outlook for earnings and dividend payments improves. Under the chairmanship of Rob Campbell, who was appointed in 2013, the company has sold off extra capacity and bolstered margins as it benefits from record tourism.
"We like the company. We think that tourism is a real growth industry, particularly in this part of the world," said Brian Gaynor, executive director at Milford, which has $3.6 billion under management. "We take a medium, long-term view and we think that the tourist sector in Australasia has got very good prospects over the next 10 to 20 years."
Mr Gaynor said the company has been completely changed in the past few years with a new board of directors and a new chair.
"That has brought a dramatic change in the company," he said. "The company is performing very well. We have done very well out of it and we think it has good long-term prospects."
New Zealand and Australia were attractive, safe destinations for retired people who liked to travel throughout the country exploring destinations such as mountains and vineyards rather stay put at a beach, he said.
Milford intended to keep its stake in Tourism Holdings well below the 20% level that would trigger requirements to make a takeover offer to all shareholders, Mr Gaynor said.
The fund manager also has tourism investments through its holdings in Millennium & Copthorne Hotels New Zealand and Air New Zealand.