AMA drives off with Automotive Solutions prize after winning takeover bid II
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With just a few days left in the year AMA has won in its takeover bid for Automotive Solutions Group, swallowing the last pieces after a months-long hunt.
AMA’s off-market 35c-a-share bid reached the 90 per cent threshold on Monday, and the crash repairer moved to compulsorily acquire the remainder late on Tuesday.
The drawn out bid, launched on November 1, followed another in May also at 35c that Automotive (ASX:4WD) managed to fight off.
Initially chairman Kenneth Carr said the offer was about a third lower than the company’s $1 price a year ago when it listed on the ASX in December 2016.
AMA, which operates about 100 crash repair shops around Australia, cited poor financial performance and board disunity as reasons to support its bid, noting the company had changed its CEO and CFO, gained and lost chairmen twice this year, and had “engaged multiple apparent turnaround specialists and contractors”.
AMA said there were “two warring factions fighting for control of the board with two extraordinary general meetings to be held at different times on 13 November 2017 and in different locations”.
Automotive Solutions brought together eight different businesses in the 4WD and SUV parts and services sector.
A profit downgrade in April led to the departure of the managing director. A factional battle ensued as different groups sought to blame others, call extraordinary meetings, and lob legal threats.
When the second bid was launched, Dr Carr and two new directors had only been in the job a week, while the CEO, Bryan Granzien only joined in August.
AMA then had to quick step away from its original justifications.
Instead, it fretted that the old directors might return and that the new board had “ no prior experience or involvement” in the company.
But the final nail came in late November when Automotive solicited and accepted a $3.5 million loan from its suitor to cover a $2.5 million tax debt – due the next day.
Automotive only had $1.2 million in free cash left by the end of September and it wasn’t allowed to pay out of a bank loan facility.