Alan Clarke, managing director of Hellaby Holdings.
Alan Clarke, managing director of Hellaby Holdings.
Bapcor, the ASX-listed auto-parts company, says it's confident it will get acceptances for more than 50 per cent of Hellaby Holdings under its takeover offer and may waive its 90 per cent ownership condition.
The Overseas Investment Office has approved Bapcor's $3.60-per-share offer, it said in a statement to theASX. The Australian company said it committed to investing in technology, operations and jobs at Hellaby over the next three to five years as part of its application to the OIO. Bapcor lifted its original offer, launched in September, from $3.30 on December 5, but said it would not increase the price further despite Hellaby's directors seeking an additional 18 cent dividend.
The offer Bapcor made included the condition that it receive acceptances for 90 per cent of the voting rights in Hellaby, letting it enforce mop-up provisions to take the company private. Bapcor can waive that condition making its offer conditional on it getting acceptances for 50 per cent of the voting rights.
As of yesterday, Bapcor held 46 per cent of Hellaby, according to NZX filings. It also has acceptances for a further 3.75 per cent of the shares when the offer becomes unconditional.
"Bapcor are now confident of achieving in excess of 50 per cent of the shares of Hellaby given acceptances received to date," it said. "If Bapcor receives acceptances which on transfer would confer on Bapcor more than 50 per cent of the voting rights in Hellaby, the Bapcor board may consider in early January whether it will waive the 90 per cent condition and declare Bapcor's offer unconditional."
If the offer is declared unconditional, accepting shareholders will be paid within seven days, the company said.
Last Friday, the Hellaby board advised shareholders not to accept the offer, provided first-half guidance for profit of up to $39.5 million, and promised a special dividend if the offer fails.
Hellaby's chairman Steve Smith said if the offer fails, the board intends to immediately confirm an interim dividend in line with existing policy, which is to distribute around 75 per cent of net profit, and pay a special dividend "to allow shareholders to benefit from the capital gain realised on the equipment group sale." In June, the company said it would realise a capital gain of about $30m after costs and working capital adjustments on the equipment group's book value from the sale.
Bapcor's chief executive Darryl Abotomey said the guidance was disappointing, as without the benefit of the sale of Hellaby's equipment group profit would be between $4m and $5m, compared to $4.7m a year earlier.
Hellaby shares last traded at $3.41, and have gained 16 per cent this year, while ASX-listed Bapcor last traded at A$5.84, up 39 per cent this year.
