A proposed $2.3 billion merger between two of the nation’s biggest vehicle retailers has gone up a gear with Automotive Holdings Group urging its shareholders to accept an improved takeover offer from rival AP Eagers.
The two companies announced on Wednesday AP Eagers had agreed to vary its previous all-scrip offer to acquire the ordinary shares in AHG it does not already own.
AP Eagers is now offering one share for every 3.6 AHG shares, instead of one for 3.8 AHG shares and the two companies have entered an implementation deed.
Assuming regulatory approval is granted, the merged group is expected to have a market capitalisation of approximately $2.3 billion.
Last week it was reported AP Eagers’ takeover bid had secured the backing of more than half its rival’s shareholders despite the AHG board advising no action on the offer just yet.
On Wednesday AHG Chairman Richard England said the improved offer was in the best interests of shareholders, in the absence of a superior proposal.
AP Eagers chairman Tim Crommelin said he looked forward to getting the deal done as quickly as possible
“We are delighted the AHG Board shares our view on the logic and benefits of bringing the two companies together to create Australia’s leading automotive group,” Mr Crommelin said.
The closing date of the improved offer remains at September 16.
Shares in AHG were worth $2.40 before trade on Wednesday, up 26 per cent since the takeover bid was announced in April but still down from $3.42 a year ago.
AP Eagers’ shares were worth $9.08 before Wednesday’s open, up from a $7.28 price before their takeover bid and $8.78 a year ago.