Thursday 5th January 2017
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ASX-listed auto-parts company Bapcor has built a 48.7 percent stake in Hellaby Holdings, creeping closer to winning control of its NZX-listed target.
Bapcor had previously held 47.5 percent of Hellaby on Dec. 28, 2016. Under its takeover offer made in October, it wants to buy up to 90 percent of Hellaby at $3.60 per share, a threshold which would allow it to enforce mop-up provisions to take the company private.
However, Bapcor has said it may waive the 90 percent target, making its offer conditional on it getting acceptances for 50 percent of the voting rights, which it says it's confident of achieving, and its board will consider that option in early January. As of the latest disclosure, it has conditional acceptances for a further 1.14 million shares, or about 1.2 percent, based on the offer becoming unconditional. Its previous disclosure had conditional acceptances for 1.5 percent of the shares.
Hellaby's board has advised shareholders not to accept the offer, which it says undervalues the company. Bapcor lifted its offer to $3.60 in December from the initial $3.30 bid, but said it would not increase the price further despite Hellaby's directors seeking an additional 18 cents per share dividend.
The Hellaby board's first-half guidance is for profit of up to $39.5 million, which includes a one-off $30 million gain from the sale of its equipment group. The company has promised a special dividend if the offer fails. Bapcor's chief executive Darryl Abotomey said the guidance was disappointing, as profit would be between $4 million and $5 million, compared to $4.7 million a year earlier, once one-off gains were excluded.
Hellaby shares last traded at $3.52, up 20 percent in the past 12 months, while ASX-listed Bapcor last traded at A$5.95, up 43 percent from a year earlier.
“ This outcome of the bid always appeared inevitable. The lockup agreements with ACC ( 8.2 %) and Castle Investments ( 27.1 %), Aspiring ( .56 %), and Pengana (.7 %) gave Bapcor a significant Holding (37% ). Bapcor only needed 13% to gain control. Some shareholders have lost confidence in Directors who say that the shares are undervalued at $3.60 now after the shares traded as low as $2.45. They are likely to sell into the offer." said Mr Brent King CEO of Equity Investment Advisers.
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