Driving towards a union

Automotive Holdings urges patience on offer

AUTOMOTIVE Holdings Group has urged shareholders to sit tight on a $2.42 billion takeover offer from rival vehicle retailer AP Eagers, warning they may be disadvantaged if they agree to sell before the “highly conditional” deal is approved.

AHG, which has appointed KPMG to prepare an independent expert’s report for its target’s statement, advised shareholders not to respond to yesterday’s bidder’s statement until the board had made a recommendation.

AP Eagers, currently AHG’s largest shareholder with 29 per cent courtesy of rich-lister Nick Politis (pictured), earlier reconfirmed its April 5 offer of one share for every 3.8 AHG shares.

The offer is worth $1.92 a share, representing a premium of 7.63 per cent to AHG’s April 4 closing price.

But AHG told shareholders yesterday that its shares were currently valued higher than the offer, trading at $2.415 at lunchtime yesterday.

This price is 20 per cent higher than the value of AP’s offer and 36.7 per cent higher than AHG’s closing price on April 4.

AHG said it would release its target’s statement on or before May 8.

“There is no benefit to you in accepting the offer (or to take any other action) at this time and you may be disadvantaged if you do,” the acting chairman of AHG, John Groppoli, said. “The offer is highly conditional and AHG expects that there will still be a significant period of time for you to determine a course of action following receipt of the target’s statement.”

Earlier this month AP Eagers’ chief executive Martin Ward said the proposed deal would create synergies by bringing together two complementary businesses to better weather new electric and automated vehicle markets, declining new car sales in Australia and increased around financing.

Shares in AHG bottomed out at a near decade-low of $1.22 in January after flagging a $223 million writedown against its struggling franchised and refrigerated logistics businesses.

Mr Politis owns a 36.35 per cent stake in AP Eagers, as well as his 28.8 per cent interest in AHG. He is also the chairman of Sydney-based NRL team the Sydney Roosters. regulation