AP Eagers has acquired a provisional majority stake in Automotive Holdings Group, just a week after AHG told shareholders not to accept the offer until it released its target statement on May 8.
The Brisbane-based AP said it received additional non-binding acceptances of its one-for-3.8 share swap offer, which increased its provisional stake in AHG to 51.35 per cent.
BusinessNews understands the majority of acceptances come from the Wheatley family and funds manager Perpetual, which already shareholdings in AP.
AP currently owns nearly 29 per cent of AHG, and said the merged group would have a market capitalisation of around $1.84 billion.
It increased its provisional stake by 9.15 on Friday, and yesterday it announced an additional 4.63 per cent of acceptances, which took its total provisional stake to 42.62 per cent.
AP Eagers chief executive Martin Ward said reaching beyond 50.1 per cent so early after they introduced the offer represented a “massive” vote of confidence in the company.
“This strongly signals a belief ... that both companies will be stronger together under our proven management expertise and track record of profitable growth,” Mr Ward said.
AHG chair Richard England said the strategic rationale of putting AHG and AP Eagers together was not in question.
"The bigger question remains the relative share of value between the two sets of shareholders and the sharing of synergy benefits," he said.
"An Independent expert will also quantify fair value, and we see no benefit to shareholders formally making a binding acceptance of the offer at this time, especially as the offer remains open for over four months.”
Today, the Australian Competition and Consumer Commission also announced it started to assess an application lodged by AP for authorisation to acquire AHG.
ACCC chair Rod Sims said AP’s application is the first merger authorisation considered by the ACCC since reforms in 2017 restored the watchdog’s ability to consider applications for merger authorisation.
“The ACCC’s assessment will focus on the likely effects of the proposed acquisition on competition, and under the authorisation test the ACCC can also consider whether any public benefits likely to arise from the proposed acquisition would outweigh the public detriments,” he said.
