Hellaby Holdings Limited is continuing to advise it’s shareholders not to accept the Bapcor offer, as it believes it doesn’t reflect fair value for the company, and there are better options to pursue.
The Takeovers Panel is telling Hellaby Holdings Limited that, as a result of Bapcor’s public statements, the offer price of $3.60 per share is a ‘last and final’ offer price which, under the Takeovers Code, cannot now be varied.
Bapcor’s public refusals regarding a dividend now exclude the possibility of an additional dividend payment on top of its current offer price of $3.60,
“The Panel advice this morning makes it clear that Bapcor cannot increase its bid price. While we were pleased to see that Bapcor listened to shareholders and your board and raised its offer this week, we still believe that its offer price does not reflect fair value for Hellaby,” says Hellaby chair Steve Smith.
“We have other options. 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,” he says.
The offer price is at the very bottom of the independent adviser’s value range of $3.60 to $4.12 per share.
The offer now closes on January 18, 2017, so there is no urgency to accept, and shareholders are encouraged to wait for further advice from the Hellaby independent directors before deciding whether to accept or reject the offer.
For Bapcor’s offer to succeed, it must receive acceptances from 90% of Hellaby’s shareholders. However, if Bapcor reaches acceptances for more than 50% of Hellaby’s shares, it could waive the 90% condition and become Hellaby’s majority shareholder.
If Bapcor did so, it would represent a different set of risks and opportunities for Hellaby shareholders who may then remain as minority shareholders in a company controlled by Bapcor.
This scenario would pose some significant complexities for Bapcor as it would not be able to realise the synergies of complete ownership fully.
Hellaby would remain publicly listed on the NZX and subject to NZX requirements, including independent director membership (although potentially different independent directors than those currently serving shareholders) on the Hellaby Board and restrictions on related party transactions.
The Hellaby Board is meeting on December 15, 2016, to discuss this further, and the independent directors will then provide further guidance to shareholders at that time.
Meanwhile, the independent directors recommend that shareholders do not accept the offer until they receive further communication from Hellaby Holdings Limited.
