Struggling automotive parts retailer and distributor, Bapcor (ASX:BAP), has confirmed that US private equity group Bain Capital has lobbed a non-binding offer at around $5.40 a share, approximately $1 above Friday’s close of $4.36.
The mooted offer price is a large discount to the $6 plus level the shares were trading at in late April before Bapcor announced that it had lost about-to-be CEO, Paul Dumbrell, halted trading, and then revealed in a statement on May 2 a host of operating problems and falling earnings.
Bapcor warned of possible write-downs to be announced with the June 30 results in August.
In a statement to the ASX on Tuesday, Bapcor said the offer was made Friday after the market closed for the week ahead of the long weekend.
Bapcor said the "unsolicited, indicative, conditional, and non-binding proposal from Bain Capital Private Equity, LP was to acquire 100% of the shares in the Company (on a fully diluted basis) by way of a scheme of arrangement.
"Under the terms of the Indicative Proposal, Bapcor shareholders would receive $5.40 cash per share (adjusted for any dividends paid or declared after the date of the Indicative Proposal).
The non-binding offer from Bain is subject to all the usual conditions in offers of this time. For that reason, it can't be taken seriously until considered by the company and gets all the approvals.
Bapcor said it was "disclosing receipt of the Indicative Proposal in advance of the Board concluding its assessment of the Indicative Proposal. The Indicative Proposal is also expressed to be subject to a number of conditions including satisfactory completion of due diligence, execution of a binding scheme implementation agreement, unanimous recommendation from the Bapcor Board of Directors, and commitment from all directors to vote in favor of the transaction (in the absence of a superior proposal and subject to an independent expert concluding that the transaction is in the best interests of Bapcor shareholders), approval of Bain Capital’s Investment Committee, and receipt of all regulatory and statutory approvals (which will include approval of the Foreign Investment Review Board, alongside any other regulatory approvals that are determined to be required).
"The Board cautions that at this time there is no guarantee that the Indicative Proposal put forward by Bain Capital will result in a binding offer or that any transaction will eventuate.”
Bapcor shares are down 19% year-to-date after losing two CEOs since January and revealing operating strains with too much slow-moving stock and tightening profit margins.
