Tuesday 27 September 2016 02:13 PM
UPDATE: Hellaby shares climb 8.6%, almost matching Bapcor's $322.5 mln takeover offer
(Recasts to focus on share price reaction, adds broker comment, ASX notice)
By Paul McBeth
Sept. 27 (BusinessDesk) - Hellaby Holdings shares climbed 8.6 percent to $3.29, just below the price offered by
Australian-listed autoparts firm Bapcor's $322.5 million takeover bid.
The NZX-listed company's board said it "strongly recommends" shareholders put off selling until it provides further
guidance, and will meet to consider the takeover notice and appoint an independent adviser. Preston, Victoria-based
Bapcor is offering $3.30 a share to take full control of Hellaby, an 8.9 percent premium to yesterday's closing price of
$3.03, and has secured acceptances totalling almost 30 percent, according to a notice to the stock exchange. Bapcor
wants to delist Hellaby, and plans to sell the equipment, resources and footwear businesses to focus on the automotive
"It's a very small premium to pay for a 100 percent takeover, I don't think there's any doubt about that," said Grant
Williamson, a director at Hamilton Hindin Greene in Christchurch. "The shares have been trading around $3.29, $3.30, so
some investors might already have come to the conclusion that there might be a little sweetener."
Hellaby has been overhauling its portfolio and investment strategy under new managing director Alan Clarke, who took
over the reins last November, to exit non-core businesses and focus on its automotive and resource services units. Last
month the investment firm posted a 30 percent decline in annual profit to $19.6 million, having lowered earnings
guidance earlier this year.
Bapcor chief executive Darryl Abotomey said the deal would let the company "enter the New Zealand automotive parts
market and use its scale and proven industry expertise to improve the service and range of products offered in New
Zealand, while looking for opportunities to expand, as it successfully has in Australia."
If it doesn't succeed in taking over Hellaby it plans to enter the New Zealand automotive market either organically or
through an acquisition, the takeover notice said.
Salt Funds, Accident Compensation Corp and the former Hugh Green Holdings, now called Castle Investments, have agreed to
sell to the Australian company.
"Bapcor believes that no other competing takeover is likely to be forthcoming given that certain Hellaby shareholders
have irrevocably agreed to accept this offer," it said.
Williamson said Bapcor has made a number of acquisitions to expand its Australian business and has been a very good
performer compared to Hellaby, which has "lagged behind the market quite seriously over the last few years."
The Australian firm may waive the condition to achieve 90 percent, providing it gets more than half of the shares on
issue and Overseas Investment Office approval, in which case it would seek board representation to push for a shift in
The deal will be funded through debt from Australia & New Zealand Banking Group and A$185 million of new equity raised through a fully underwritten A$165 million
institutional placement, and A$20 million share purchase plan.
The placement and share purchase plan were priced at A$5.85 a share, a 5 percent discount to yesterday's closing price
of A$6.16. Trading in the shares was halted pending the stock offering.