Automotive Holdings Group has urged shareholders to sit tight on a 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 respond to Tuesday’s bidder’s statement until the board had made a recommendation.
Automotive Holdings Group in February announced a write-down of $147 million across its 105 car dealerships around Australia and New Zealand.Credit:Rob Homer
AP Eagers, currently AHG’s largest shareholder, earlier reconfirmed its April 5 offer of one share for every 3.8 AGH shares.
That valued AHG at $2.42 billion when the bid was lobbed but, while that has since risen 19 per cent in line with a subsequent increase in the value of AP Eagers shares, the relative premium to AHG shareholders has decreased because of a larger 36 per cent appreciation in AHG shares. AHG said it will release its target’s statement on or before May 8.