McMillan Shakespeare Limited And Eclipx Group Have Provided A Merger Update: A Brief Overview

Eclipx Group Limited (ASX: ECX) and McMillan Shakespeare Limited (ASX: MMS) had come forward and issued a release which provides information about the merger. The release dated January 29, 2019 which was issued by Eclipx Group stated that McMillan Shakespeare Limited has made requests for the information with regards to ECX’s FY 2019 YTD (year-to-date) financial performance, expectations related to the outlook as well as other matters. However, this release also stated that Eclipx Group Limited had also responded. Further, ECX had also sought confirmation from McMillan Shakespeare that whether they are planning to move ahead according to the scheme timetable. While responding, McMillan Shakespeare Limited stated that they are planning to fully comply with the obligations with regards to SIA however, they would be requiring time so that next steps can be considered. 

We would now have a look at the press release which was issued by McMillan Shakespeare Limited. As per the press release dated January 29, 2019, McMillan Shakespeare Limited had noted the announcement which was made by Eclipx Group Limited and McMillan Shakespeare Limited has been working towards it. This press release stated that it would take time and the companies have decided that the date with regards to the first court hearing would be rescheduled. Earlier, the date was February 1, 2019.

Eclipx Group Limited had also threw some light on the NPATA performance as well as expectations. As per the release issued by Eclipx Group, there are expectations that, for FY 2019, the company’s Net Profit after Tax and before amortisation or NPATA would be broadly in-line with the NPATA of the FY 2018 (reported). The release also stated that there are expectations that, for FY 2019, anticipated net profit before tax would be showing increased growth as compared to the company’s pro-forma pre-tax results for FY 2018 because average corporate tax rate stood at 25% in FY 2018 while the corporate tax rate for FY 2019 has been anticipated to be 29%.

We would now have a look at how the stocks of both the companies (i.e. Eclipx Group Limited and McMillan Shakespeare Limited) have performed today and how they have been performing from the past few months. Eclipx Group Limited is currently trading at $2.210 per share which implies the fall of $0.010 or -0.45% (intraday). In the previous one month, the stock of Eclipx Group Limited has delivered the negative return of 8.64%. However, the stock of Eclipx Group Limited has delivered the return of -28.16% over the span of previous 6 months.

Also, McMillan Shakespeare Limited’s stock is currently trading at $14.940 per share which implies the fall of $0.50 or -3.238% on the intra-day basis. The market capitalisation of McMillan Shakespeare Limited stood at $1.28 billion. However, the annual dividend yield of McMillan Shakespeare Limited is 4.73%. Over the past 3 months and 6 months, this stock has delivered the return of -1.68% and -2.29%, respectively.


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