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Hellaby offers sweetner against takeover

NZ Newswire logoNZ Newswire 15/12/2016 Sophie Boot

Hellaby Holdings, which is engaged in a battle to fend off unwanted suitor Bapcor, has advised shareholders not to accept a revised takeover offer as it touts improved profit and a special dividend if the offer fails.

ASX-listed auto-parts company Bapcor has lifted its offer to $3.60 a share from $3.30 earlier this month after launching its bid in September.

The takeover has seen an escalating war of words between the two, with Bapcor taking issue with the independent adviser's report, and Hellaby's directors seeking an additional 18 cent dividend on top of the $3.60 share price, a proposal rejected by Bapcor.

On Wednesday, Bapcor said it now owned just over 40 per cent of Hellaby, which operates automotive companies such as BNT and Diesel Distributors as well as shoe retailers Hannahs and Number One Shoes.

In a statement to the NZX on Friday morning, Hellaby directors say $3.60 continues to undervalue Hellaby and its businesses.

The board expects sales between $383 and $388m, an uplift on 2016's $378.8m, and profit between $38.5m and $39.5m, from $4.7 million a year earlier, helped by about $34.5m realised on the sale of the equipment group.

"Bapcor has stated that it is only interested in Hellaby's automotive group and that it intends to sell Hellaby's other business groups," the directors said.

"Bapcor is attributing insufficient value to these other businesses and will be motivated to sell them as quickly as possible."

Hellaby's chairman Steve Smith says if the offer fails, the board intends to immediately confirm an interim dividend - distributing around 75 per cent of net profit.

A special dividend will also allow shareholders to benefit from the capital gain realised on the equipment group sale.

Craigs Investment Partners has written to its partners recommending that shareholders accept the offer.

Shareholders were told the price of $3.60 provides "reasonable value against the current Hellaby share price of $3.45", it said.

Hellaby shares last traded at $3.45, down 0.3 per cent in early trading and up 17.7 per cent this year.

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