Takeover in Play?

Sealink nets a suitor, board moves to steady ship
The tables have turned for acquisitive ferry and tourism operator SeaLink.
Street Talk can reveal an informal approach was made last month for the $385 million company behind the Captain Cook cruises business, which operates on Sydney Harbour and Perth's Swan River.
It is understood the offer was indicative and non-binding, as is commonplace with such early-stage proposals. The SeaLink board is under no obligation to reveal such pitches from tyrekickers.
However, the board did not ignore the corporate interest altogether. This column can reveal SeaLink, chaired by Andrew McEvoy, has drafted in Macquarie Capital to shore up its defences.

It could be viewed as an opportunistic time for an offshore strategy player or private equity group to pounce on a company operating in a sector expected to flourish.

Increasing overseas tourist numbers, particularly cashed-up middle class Chinese, offer a robust growth profile to any new owner at a time when SeaLink's shares have fallen flat.
SeaLink's profit has taken a hit as it builds up its businesses and expands its offering. Its shares are down 8 per cent over the past 12 months, closing at $3.81 on Tuesday.
SeaLink, which owns the contract for the lucrative monopoly ferry route to Kangaroo Island off South Australia, has been snapping up smaller assets and expanding its geographic reach.
It acquired a 10 per cent stake in a Hong Kong-based technology company, UWAI Limited, in March to drive more Asian tourists to its Australian operations and give it greater clout in the booming Chinese tourist market.

The initial investment in UWAI was $US2.5 million ($3.2 million) but the company has rights to lift its holding under the sale agreement.
In the same month the group completed its $43 million purchase of Kingfisher Bay Resort, which it forecast to be earnings accretive in fiscal 2019.
SeaLink listed on the ASX in late 2013 after issuing shares in its float at $1.10 a piece. It operates 75 ferry services in various parts of Australia, including Sydney Harbour, South-East Queensland, Darwin and Perth.
The company blamed a 13.7 per cent slump in interim profit in February on a combination of higher costs incurred on new services and an economic downturn in Western Australia, which pushed revenue from its Captain Cook Cruises division down 8 per cent.

But it is upbeat about improving margins in 2019 and achieving sales growth. It tipped second half net profit to be in line with the prior year.