Automotive Holdings Group Limited (ASX: AHG), established in 1952 and headquartered in West Perth, Australia, is engaged in the automotive retail and logistics businesses. The company operates via four key business segments including Automotive Retail, Refrigerated Logistics, Other Logistics, and Property segments.
On April 5th, 2019, A.P. Eagers Limited (ASX: APE) announced its intention to make conditional, all-scrip proposal to acquire all of the ordinary shares in Automotive Holdings Group Limited (ASX: AHG) that it does not already own (current interest 28.84%) by way of an off-market takeover bid. The AHG shareholders would receive one ordinary fully paid share in AP Eagers for every 3.8 shares owned in AHG, as per the offer.
Moreover, as per AP Eagers, the bid presented an opportunity for AHG shareholders to reap the expected benefits afforded by the enhanced diversification and flexibility of the combined group. Also, the commercial rationale behind the merger was essentially underpinned by a greater geographical portfolio diversification, enhanced brand portfolio diversification, anticipated pre-tax cost synergies estimated at ~ $ 13.5 million per annum if AP Eagers acquires over 90% of AHG Shares, a more flexible balance sheet, AP Eagers’ proven management expertise and other factors.
However, in an announcement on April 23rd, 2019, Automotive Holdings Group informed the shareholders that there were no benefits to them in accepting the offer, which remains highly conditional. Besides, the shareholders should take note as the AHG shares price has been trending above the value contained in the offer.
As per latest update, AHG has assigned KPMG the charge to conduct an independent assessment report of the offer that would be included in the Target's Statement for the AHG shareholders due to be released on May 8th, 2019. The target statement will essentially contain the Board’s recommendation with respect to the bid and the rationale for the same.
A.P. Eagers established institutional acceptance facility in respect of its off-market takeover bid and since then, A.P. Eagers’ interest in AHG has changed from 28.84% to 42.6174%, via the Shares which are the subject of the Acceptance Facility.
According to Automotive’s half-yearly results for the six months to December 31st, 2018, the Group recorded a revenue of $ 3.22 billion, up on $ 3.17 billion in the prior corresponding period (pcp), and a statutory NPAT of $ 225.6 million, which is much higher than $ 40.7 million in the pcp. An operating EBITDA of $ 93.4 million was reported with an EBITDA margin of 2.9%. Besides, the Group also posted a statutory loss of $ 225.6 million during the period.
The company has current market valuation of around AUD 792.58 million with ~ 331.62 million outstanding shares and an annual dividend yield of 6.82% (As per ASX). On April 30th, 2019, the AHG stock price settled the day’s trading at AUD 2.40, edging up 0.42%. Moreover, AHG has also generated a positive YTD return of 57.24% so far.
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.