Bapcor will not be including dividends as part of its sweetened takeover bid for Hellaby Holdings, sparking more public debate between the two companies.
Bapcor CEO Darryl Abotomey said Hellaby Board’s suggestion that an 18 cent dividend be paid in addition to Bapcor’s revised $3.60 cash offer price is ‘a continuation of Hellaby’s unrealistic views on the company’s valuation’.
“Unfortunately, Hellaby independent directors’ unrealistic views on what Hellaby shares are
“This follows their earlier endorsement of the Independent Adviser’s valuation range for Hellaby shares that, in our view, improperly excluded corporate head office costs and resulted in an overstated valuation range.”
Abotomey also said Bapcor gave Hellaby an option which included a dividend but this was rebuffed.
“As part of our discussions with the Hellaby Chairman last week, we made it very clear that our views on value meant that the maximum consideration to shareholders was $3.60. We gave them the option that this could be delivered either by an offer price of $3.42 in cash per share payable by Bapcor, plus an 18 cent per share dividend; or $3.60 in cash per share payable by Bapcor.
“They did not take the opportunity to agree to a dividend, which would have allowed shareholders to benefit from imputation credits, and that left us with no choice but to put our best foot forward with our offer price of $3.60 in cash per share. Bapcor will not be increasing its offer price further.”
Meanwhile in a letter to its shareholders, Hellaby chairman Steve Smith said the offer still does not reflect fair value.
“We could continue under our growth strategy, communicated in May 2016, which we believe will deliver attractive long term value to shareholders, or we too could break up the Company and realise the value embedded in each group in an orderly and careful process over time.”
Abotomey also said that Hellaby’s net debt remained unchanged between June and September at approximately $83.5 million, despite the contribution from underlying trading and the cash proceeds from the sale of its Equipment business.
“They have already spent the proceeds,” he said. “Any dividend paid by Hellaby would effectively be funded by Bapcor, if the takeover is successful, as Bapcor would take on Hellaby’s net debt.”
“$3.60 in cash is our final offer, we now believe the remaining shareholders will also see that this represents the best value for their shares.”
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.
