SeaLink Travel Group Limited (ASX:SLK)

Rejected the acquisition offer unanimously: Ferry operator, SeaLink Travel Group Limited, aims to bring the nation’s best tourism experiences to the world and has shown a decent performance in the latest half-year period, and the trend in revenue growth and earnings over the past few years has continued. The Group recently received an unsolicited, confidential, indicative and non-binding proposal from a party regarding a potential acquisition of SeaLink. The party expressed its interest in a transaction which would have resulted in a change of control of SeaLink. The proposal was to acquire 100 per cent of shares in SeaLink for cash consideration of $4.75 per share.

The Board after discussing with its financial advisers unanimously took a decision to reject the offer as according to them the offer undervalues the SeaLink and that the Board would not be in a position to recommend the Proposal to its shareholders.So, the proposal was withdrawn subsequently. Management recommended the shareholders not to take any action as they believe that SeaLink is well positioned to continue to deliver strong growth. The Company is responsible in complying with all the disclosure requirements with respect to ASX Listing Rules and will ensure it is in full compliance at all times. The Group retained Macquarie Capital (Australia) Limited as its financial adviser and Kain Lawyers as its legal adviser in relation to evaluating the proposal.


Operating Revenue H1FY18 Performance (Source: Company Reports)

The Group recently successfully completed the acquisition of Fraser Island Kingfisher Bay Resort Group on Fraser Island, Queensland, for $43 million from Cosmos Australia Pty Ltd and this is expected to deliver earnings per share accretive in the first full financial year. The Group is planning to expand its services like it is planning to acquire a new passenger vessel which will be initially used for its Sydney operations. It will deliver the positive synergies and will increase its national footprint of services and offerings to iconic destinations. In last one year, the stock was down by 7.75 per cent, and by 6.85 per cent in last three months (as at May 22, 2018). Just after the update on the acquisition proposal, the stock went up by 10.24 per cent on May 23, 2018. The rejection of the proposal indicates that the management is confident on the company having a good value while the market is now keeping a watch on any enhanced or superior proposal to come its way.

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