Gullivers takeover 'done and dusted'

The takeover of Gullivers Travel by the Australian company S8 already appears to be a done deal, despite the official bidder's statement not being due until the close of trading today.

UBS Nominees yesterday declared it had reached a stake of 13.84 per cent in the NZX-listed travel agent.

Despite the shares trading at around the S8 offer price of $2.35, UBS and several other big investment funds have been buying Gullivers' shares on market to cash in on the special dividend of 5c a share being offered with the deal.

All are expected to sell out quickly to S8 when the offer opens.

On Tuesday, the Australian hedge fund Monterrey declared a 12 per cent stake and Goldman Sachs has a 5 per cent stake. The deal - which is conditional on reaching just 50.1 per cent - already has the support of cornerstone shareholder Andrew Bagnall with 27 per cent.

Given the high turnover of shares in the past few weeks, the combined stake of likely sellers was now in excess of 60 per cent, said Matt Henry, an analyst at Goldman Sachs JBWere. "It's done and dusted."

He said the big funds would be using borrowed money to buy their stakes, and would want to sell into the offer as quickly as possible to minimise interest costs and maximise their profit.

It was also reasonable to assume there were smaller players following a similar strategy who had not reached the 5 per cent threshold which required them to declare their hand to the NZX, he said.

Queensland-based S8 made the offer in May, valuing the company at $235 million. S8, whose business includes Harvey World Travel, has also made successful takeover bids for the Australian companies Transonic Travel and Travelscene.

If successful with Gullivers, S8 will have a market capitalisation of more than A$650 million ($776.3 million).

Gullivers' shares, trading at $1.67 before the offer, closed at $2.36 yesterday.