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Sealink Travel Group Ltd (ASX:SLK) shares rocket on takeover approach news

I’m starting to think that it must be takeover season. Within the space of just a few months no less than five ASX shares have been subjected to takeover offers.

These include the likes of BWX Ltd (ASX: BWX), Healthscope Ltd (ASX: HSO), Lifehealthcare Group Ltd (ASX: LHC), Santos Ltd (ASX: STO), and Sirtex Medical Limited (ASX: SRX).

Well you can add another one to that list after Sealink Travel Group Ltd (ASX: SLK) responded to media speculation by confirming that it has also received an unsolicited, non-binding, and conditional takeover approach.

According to the release, the travel company has received an offer to acquire 100% of its shares for $4.75 cash per share from an undisclosed company.

After careful consideration between the board and its financial adviser, Macquarie Group Ltd (ASX: MQG), the offer has been unanimously rejected on the basis that it undervalues the company. As a result, the proposal has now been withdrawn.

The board has recommended that shareholders take no action in respect to the proposal. But with SeaLink’s share price zooming 11.5% higher to $4.25, it seems that some investors are ignoring management’s advice and may be expecting the suitor to return with a better offer.

Should you invest?

While I do think that SeaLink is a great company which is well positioned to benefit from the tourism boom that Australia is experiencing, I wouldn’t rush into buy shares on the back of this latest development.

Especially with oil prices rising significantly over the last few months. If the company is unable to offset rising fuel costs with price increases, there is a chance that it could hurt margins.

In light of this, I would keep SeaLink on your watchlist for the time being and wait for its full-year results release before considering an investment.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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