Statements play down prospect of takeover after founder's family sells stake to main competitor
July 10, 2012
The share market appears to have entertained further demand for Automotive Holding Group (AHG) after AP Eagers swooped on more than 42.6 million shares formerly owned by the family of AHG founder Vern Wheatley.
AHG shares rose from $2.53 yesterday to briefly hit $2.70, before settling just above $2.60 early this afternoon.
The purchase, involving $88.4 million over two years and 10.2 million Eagers shares, gives Eagers 16.3 percent of its main competitor and the Wheatley family 6.1 percent in Eagers.
The Wheatley family will retain about 8 percent of AHG.
The Eagers stake in AHG is 3.7 percent under the threshold needed to require a takeover offer.
A full takeover would see a strong concentration of truck and car dealerships.
While Eagers made no mentioned of such a move, CEO Martin Ward’s statements seemed to leave the option open, with talk of being able to add “significant value” and the fact that the firms have a franchise structures in common.
Ward also notes that AHG has exposure to the Western Australian market, “where AP Eagers does not currently have operations”.
However, it appears Eagers, which is also known by its stock market code, APE, has sought to downplay the idea.
“The CEO of APE spoke with me and indicated that this was a single purchase from a single shareholder and they do not have any current intention to buy more shares in AHG,” AHG Chairman David Griffiths says.
“That, of course, is a decision for them and not for us.”
An AHG spokesman was unable to comment on that issue, though an official response was awaited at deadline today.
