Bapcor has secured 40.7% of Hellaby and wants 100%, but would settle for a controlling 50.1% stake, having upped its late-October offer 10 days ago, from $3.30 per share to $3.60.
Bapcor wants to buy-in access to Hellaby’s mainstay automotive division and its 120 outlets around the country. It is likely to sell two footwear chains owned by Hellaby.
Hellaby’s board said it did not support the $3.60 offer, without an additional 18c dividend. Most of the 40.7% stake is held in locked-in agreements with institutional shareholders.
Independent advisers Grant Samuel valued Hellaby in a range of $3.60 to $4.12.
Craigs Investment Partners broker Peter McIntyre said $3.60 was ‘‘reasonable value’’ and was recommending shareholders consider accepting it.
He said given the future influence of Bapcor, as majority shareholder, on strategy, capital structure and dividends that "could be to the detriment of minority shareholders".
"The offer price is now within the independent valuation range," he said.
The $3.60 was a 29% premium on the average three-month price and well above Craigs’ $2.88 target price for Hellaby before the opening bid by Bapcor.
"It’s been a hard-fought and contentious, hostile takeover," Mr McIntyre said.
He noted that future investment in Hellaby held "considerable execution risk" given the cyclical nature of some parts of the business, plus the targeted exit of the loss-making footwear divisions.
"This means the path to realising significant shareholder value from Hellaby, outside of this [Bapcor] offer, will take time and involves an element of uncertainty," Mr McIntyre said.
