AHG calls for patience ahead of takeover

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Wednesday 24 April 2019

Automotive Holding Group (AHG) is asking for shareholder patience ahead of a takeover bid by rival and major shareholder AP Eagers (APE).

Despite AHG viewing the bid from APE as opportunistic, a letter from John Groppoli said that the offer is “highly conditional and you will not receive any AP Eagers shares while these conditions remain outstanding,"

"If you accept the offer, you will not be able to sell your AHG shares on market."

AHG has signed accountancy firm KPMG to help with the bid. A ‘target's statement’ to AHG shareholders will be released on or before May 8.

"The Target's Statement will contain, among other things, the Board's recommendation in relation to the Offer and its rationale for that recommendation," AHG said.

"It will also outline your options as an AHG shareholder and an opinion from an independent expert as to whether the offer is fair and reasonable to AHG shareholders who are not associated with AP Eagers.

"AHG has appointed KPMG as the Independent Expert, and commissioned KPMG to prepare the Independent Expert's Report for inclusion in the Target's Statement."

The offer from APE closes on 16 September 2019.

"We’re delighted to open our offer to fellow AHG shareholders today. Under the all scrip offer, AHG shareholders can maintain exposure to AHG while also gaining exposure to AP Eagers’ experienced management team, established strategy and proven track record of execution," AP Eagers CEO Martin Ward said.

"As our industry continues to respond to structural change, we believe that AP Eagers and AHG will be stronger together. Our aim is to create long term value for shareholders in both companies to share in.

"The AP Eagers offer has no minimum acceptance, finance or due diligence condition. It is subject to only customary conditions which are outlined in the Bidder’s Statement."

"If you do not accept the Offer, you will remain an AHG Shareholder and will not be issued APE Shares, the statement said.

"However, if AP Eagers becomes entitled to compulsorily acquire your AHG Shares, it intends to do so.

"If this occurs, you will still receive the Offer Consideration for your AHG Shares but at a later date than you would have received it if you had accepted the Offer.

"If AP Eagers does not become entitled to compulsorily acquire your AHG Shares, you will remain an AHG Shareholder."

"The Merged Group is anticipated to have 229 new car dealership locations in Australia, 13 new car dealership locations in New Zealand and 68 new truck and bus dealership locations in Australia," the statement added.

"The Australian dealerships will represent 33 car brands and 12 truck and bus brands, including all of the top 26 leading car brands for the 12 months ended 31 December 2018."

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