Yesterday, Hellaby chief executive Alan Clarke released a statement saying its independent directors had unanimously recommended shareholders reject the October 21 Bapcor offer, based on $3.30 per share.
Bapcor's offer was ''significantly below'' that of the independent adviser's valuation range of $3.60 to $4.12 per share, and also below the independent directors' own view of fair value, Mr Clarke said.
''As the offer must remain open until at least 20 December 2016, there is no advantage in early acceptance and in fact there are significant potential disadvantages if accepted early,'' Mr Clarke said.
Victoria-based Bapcor has already ''locked in'' agreements with three shareholders to sell their total 29.84% stake. While the offer is for a full 100% takeover, Bapcor has indicated it could waive that condition if it gained a more than 50% controlling stake.
Craigs Investment Partners broker Peter McIntyre said the rejection ''comes as no surprise'' and ''the ball is now back in Bapcor's court''.
From the outset of the hostile offer, analysts had queried whether the 8.9% premium being offered by Bapcor was enough to entice shareholders to sell.
''It's up to them [Bapcor] to come back with another offer now,'' Mr McIntyre said.
However, Mr McIntyre threw out a caution that large institutional investors in Hellaby could be attracted to the the $3.30 offer, allowing Bapcor to build on its 29.84% stake of locked-in agreements.
Mr Clarke said the independent directors believed the offer price failed to reflect the full value of Hellaby, in particular its Automotive Group, and additionally did not fully value Hellaby's other divisions, Resource Services and Footwear.
''The independent directors believe the Automotive Group has a stand-alone value of at least $350 million, excluding the significant synergies and other benefits that would be gained by Bapcor from a merger of the two businesses,'' he said in the statement.
He said Hellaby was aware Bapcor representatives were canvassing Hellaby shareholders about the offer and recommended shareholders wait to receive, then consider, the target company statement, including the independent adviser's report, before making a decision.
