Bapcor Ltd (ASX: BAP) shares jumped higher today as good news flowed from the Hellaby Holdings takeover.
In a statement to the ASX last week, Bapcor announced that it had secured acceptances for more than 50% of voting shares in the New Zealand-listed automotive and apparel retailer as part of its $350 million takeover offer.
Previously, the board of Hellaby Holdings rejected Bapcor's offer saying that the $NZ 3.60 offer price was too low, although Bapcor initially offered just $NZ 3.30 per share.
In its announcement to shareholders this morning Hellaby Chairman Steve Smith said:
"While the Independent Directors remain of the view that the $3.60 offer price potentially undervalues Hellaby, the achievement of control of a majority shareholding in Hellaby by Bapcor adds significant risk to any future delivery of additional value to current shareholders."
"Given that change of circumstances, the Independent Directors are recommending that shareholders accept the offer," he added.
Hellaby Holdings said that shareholders who choose to hold their shares would be left in a position with "little influence" and market liquidity, as Bapcor nominates its own directors and changes the company's strategy.
Foolish Takeaway
Last week Bapcor waived the original 90% acceptance condition, which would allow it to compulsorily acquire all shares in Hellaby Holdings, despite resistance from the target's board. However, with more than 50% of shares under its control all the board could have done was make it more difficult for Bapcor to effect change in the company.
Indeed, if Bapcor can move to compulsory acquisition in the coming months then it will provide a much cleaner and efficient framework for extracting synergies from the combined businesses.
