AP Eagers (APE) bid for Australia’s largest listed car dealer, Automotive Holdings (AHG) looks like it is all over bar the shouting.
In a statement to the ASX APE revealed it is on the verge of grabbing control of rival Automotive Holdings Group (AHG) – Australia’s biggest car dealer – just a week after the opening of its $750 million all paper bid.
But before success can be declared, the offer will have to go through the vetting process by the ACCC – the competition regulator – under a new process that allows the Commission first crack at authorising mergers.
Brisbane-based APE said yesterday institutional acceptances of the one-for-3.8 share swap had increased its stake in AHG to a provisional 51.35%, including its existing 28.84%
Shareholders accounting for 22.5% of AHG, have signaled their intention to accept the bid via AP Eagers’ institutional acceptance facility which has been open since the offer kicked off on April 23.
The institutional acceptances are not binding and can be withdrawn at any point prior to the offer being declared unconditional.
Analysts say the acceptances suggests AHG’s biggest shareholders are comfortable with the offer and AHG will have no other option but to recommend the offer.
AHG has claimed the bid undervalues AHG, whose shares have been hit over the past year by its weak trading performance.
In a statement yesterday the ACCC (https://www.accc.gov.au/media-release/accc-reviews-first-merger-authorisation-application) said it had started an assessment of an application lodged by AP Eagers for authorisation to acquire Automotive Holdings Group Limited.
“AP Eagers’ application is the first merger authorisation considered by the ACCC since reforms in 2017 restored the ACCC’s ability to consider applications for merger authorisation. Under the new process, the application comes to the ACCC first rather than the Australian Competition Tribunal,” ACCC Chair Rod Sims said in the statement.
Under the new merger authorisation process, the ACCC may grant authorisation for a proposed merger if it is satisfied the merger is not likely to substantially lessen competition, or where the public benefits outweigh the detriments to the public (including where the proposed merger does lessen competition).
“The ACCC’s assessment will focus on the likely effects of the proposed acquisition on competition, and under the authorisation test the ACCC can also consider whether any public benefits likely to arise from the proposed acquisition would outweigh the public detriments,” Mr. Sims said.
