Hellaby rejects offer by Bapcor

Company directors won’t support sweetened takeover bid unless dividend is included

The independent directors of Hellaby Holdings say they won’t support Bapcor’s sweetened takeover unless it also includes a dividend payment that would use up imputation credits.

Bapcor yesterday raised its takeover offer for Hellaby Holdings to $3.60 a share from $3.30, bringing it into the independent valuation range and winning increased acceptances from the Accident Compensation Corp and drawing in other institutional investors to lift total support for its proposal to 40 per cent. Bapcor chief executive Darryl Abotomey said his company won’t increase the cash offer again.

Hellaby shares closed up 24c yesterday at $3.44. The independent directors “believe that the revised terms of the offer should also allow for the payment of a dividend, in addition to the cash offer price, to allow shareholders to benefit from both the earnings generated in the half year which has now almost completed and the large capital gain on the sale of the Equipment Group,” said chairman Steve Smith.

“The board has determined a dividend of 18c per share would allow maximum use of imputation credits which would otherwise be lost.”

Hellaby’s independent valuation from Grant Samuel was $3.60-to-$4.12 a share, published on November 1, and Hellaby had said the original offer from Bapcor under-valued the business, especially the automotive unit that Bapcor is interested in.

Bapcor countered that the valuation didn’t include Hellaby’s corporate head office costs but it failed in a request to the Takeovers Panel to look into alleged breaches of the Takeovers Code by Hellaby.

“Our discussions with various parties indicated that $3.60, which is within Grant Samuel’s independent adviser’s valuation range, would be the trigger point for them to accept our offer,” Bapcor’s Abotomey said.

“When Hellaby’s head office costs are included in the valuation, as we believe they should be, $3.60 is near the top of an adjusted range of $3.18 to $3.64 per Hellaby share.”

Bapcor extended the closing date for the offer to January 18 from December 20.