KEY POINTS:
Australia's MFS Living and Leisure has effectively issued an ultimatum to Tourism Holdings shareholders - it will not raise or extend its $2.80 a share takeover offer.
But observers say they do not expect that threat to make shareholders rush their decision on the offer that expires on July 21.
In announcing MFS would not budge on its $277 million offer, chief executive Marshall Vann said THL shares had not traded above $2.80 at any time in the past seven years.
"We decided from the onset that our first offer would be our best offer and we priced our cash offer at a 34 per cent premium to the 90 trading day volume weighted average price of THL shares," he said.
But Forsyth Barr analyst Rob Mercer, who considers the offer "credible", said shareholders needed to weigh up whether they wanted to take the immediate premium represented by the offer or wait to see what happened afterwards. "The challenge would be to look beyond the short-term gain to the strategic long term."
Shares in THL - owners of attractions including Kelly Tarlton's and Milford Sound Red Boat Cruise - fell 1c to close at $2.72 after the announcement.
MFS said about 20 per cent of shareholders had accepted the offer, which is conditional on getting 90 per cent acceptance, and called Sir Selwyn Cushing's decision to sell his family's 10.02 per cent shareholding for $2.76 cash a "strong endorsement".
But Andrew Bascand, portfolio manager at AllianceBernstein, which manages stock for 12.4 per cent stakeholder AXA, said he did not expect the announcement to influence his decision on whether to sell.
However, he noted "with interest" media reports indicating MFS appeared more optimistic about the annual growth in short-term visitor arrivals than independent adviser Ferrier Hodgson, which valued THL shares at between $2.67 and $3.07.
