AMA EYES OFF-ROAD SPECIALIST ASG FOR TAKEOVER
LISTED smash repairs firm AMA Group has lobbed a takeover offer for struggling four-wheel-drive parts company Automotive Solutions Group.
ASG investors, some of whom purchased shares for $1 in its initial public offering last year, have seen the price fall to as low as 25¢ following profit downgrades and management changes.
Yesterday, Margate-based AMA, which competes against ASG in the market for vehicle accessories, offered to buy all shares for 35¢ per share, valuing ASG at $17.62 million.
AMA chairman Ray Malone urged shareholders to accept the takeover offer.
He said a fall in forecast revenue for 2H17 from $21.5 million to between $15 million and $16.5 million and a review of ASG’s operations has created uncertainty.
“This uncertainty was compounded by the subsequent announcement that Tanya Mason had stood down from the role of chief executive,” Mr Malone said.
Ms Mason oversaw the listing of the company last year and was four months into a stint at the helm before she stepped down.
AMA said the share price offer is a 15 per cent premium on the average share price over the past month.
“You should consider the value and certainty of AMA’s all-cash offer compared with the risks and uncertainties of remaining a shareholder in ASG,” Mr Malone said.
ASG, which has an office at Robina, formed from the merger of eight parts and fabrication companies including steel fabrication firm Barden, engine remapping and performance services company Roo and Victoria-based retailer Umhauers.
Last week, it announced it had formed a corporate recovery team to address problems at Barden, Roo and Umhauers, which contributed to the poor performance.
It was also considering legal action against for the former owners of Umhauers.
AMA operates in the vehicle aftercare and accessories market. Its businesses include Gemini Accident Repair Centres, East Coast Bullbars and KT Cable Accessories.
ASG shareholders have until July 7 to accept the offer.