AHG calls on shareholders to await developments

Takeover target argues selling to AP Eagers now is premature

AHG calls on shareholders to await developments
Just weeks after launching new Foodbank branding, AHG has opened its takeover defence


Automotive Holding Group (AHG) has urged shareholder patience in response to a takeover bid by major shareholder and rival AP Eagers (APE).

In its eventual response to the April 5 bid, which AHG views as opportunistic – coming as it works through a significant and well-publicised restructuring of its refrigerated logistics division – it points out the offer is at a discount to the ‘implied’ market value of the shares.

"The offer remains highly conditional and you will not receive any AP Eagers shares while these conditions remain outstanding," AHG warns in a letter from acting chairman John Groppoli.

"If you accept the offer, you will not be able to sell your AHG shares on market."

Read how AP Eager’ takeover surfaced earlier this month, here

The hunted company has employed accountancy KPMG for the battle.

It expects to dispatch a ‘target's statement’ to AHG shareholders on or before May 8.

"The Target's Statement will contain, among other things, the Board's recommendation in relation to the Offer and its rationale for that recommendation," AHG says.

"It will also outline your options as an AHG shareholder and an opinion from an independent expert as to whether the offer is fair and reasonable to AHG shareholders who are not associated with AP Eagers.

"AHG has appointed KPMG as the Independent Expert, and commissioned KPMG to prepare the Independent Expert's Report for inclusion in the Target's Statement."

The plea comes as AP Eagers releases a 96-page bidder’s statement making the case for acceptance of its offer of one of its shares for every 3.8 AHG shares.

The offer’s closing date is September 16.

"We’re delighted to open our offer to fellow AHG shareholders today. Under the all scrip offer, AHG shareholders can maintain exposure to AHG while also gaining exposure to AP Eagers’ experienced management team, established strategy and proven track record of execution," AP Eagers CEO Martin Ward says.

"As our industry continues to respond to structural change, we believe that AP Eagers and AHG will be stronger together. Our aim is to create long term value for shareholders in both companies to share in.

"The AP Eagers offer has no minimum acceptance, finance or due diligence condition. It is subject to only customary conditions which are outlined in the Bidder’s Statement."

AP Eagers argues that its offer is a known quantity.

"If you do not accept the Offer, you will remain an AHG Shareholder and will not be issued APE Shares, the statement says.

"However, if AP Eagers becomes entitled to compulsorily acquire your AHG Shares, it intends to do so.

"If this occurs, you will still receive the Offer Consideration for your AHG Shares but at a later date than you would have received it if you had accepted the Offer.

"If AP Eagers does not become entitled to compulsorily acquire your AHG Shares, you will remain an AHG Shareholder."

While noting a comprehensive suite of risks, the firm offers the benefits of a larger merged group and the "low" likelihood of a competitive bid emerging to push up the share price.

"The Merged Group is anticipated to have 229 new car dealership locations in Australia, 13 new car dealership locations in New Zealand and 68 new truck and bus dealership locations in Australia," the statement says.

"The Australian dealerships will represent 33 car brands and 12 truck and bus brands, including all of the top 26 leading car brands for the 12 months ended 31 December 2018."


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