Ritchie Brothers Auctioneers Incorporated revealed that its IAA deal has the support of some of its biggest shareholders as the company fends off opposition from some shareholders to the deal.
In November last year, Ritchie revealed that it plans to acquire IAA in a deal valued at around $7.3 billion. Now, Ritchie is asking shareholders to approve necessary share issuances to complete the merger at its March 14, 2023, special meeting.
Clearly, Independent Franchise Partners and Eagle Asset Management are backing the Canadian auction company’s proposed takeover of IAA Inc, giving a boost to the deal.
READ: Eminence Capital to vote against “flawed and risky” Ritchie Brothers proposed merger with IAA
“We look forward to closing the IAA acquisition,” a Ritchie Bros spokesperson told Proactive.
“We have heard from many shareholders who are enthusiastic about this transaction, including many of our largest shareholders such as Independent Franchise Partners and Eagle Asset Management – who have publicly stated their support.”
Independent Franchise Partners and Eagle Asset Management collectively own approximately 8% of Ritchie’s outstanding shares.
Vote showdown
“As we have engaged with shareholders since the end of November, Ritchie Bros.’ stock price has increased approximately 17%, outperforming Nasdaq and returning to pre-transaction trading levels, which are strong indicators that investors increasingly understand the value and benefits of this combination,” added the Ritchie spokesperson.
Similarly, Starboard Value LP, which recently announced a $500 million strategic investment in Ritchie Bros, also backs the deal.
However, Janus Henderson and Eminence Capital LP, which owns 900,000 shares of Class A common stock in Ritchie, have lined up against the transaction.
“As previous IAA shareholders and long-term auto auction investors over the last 15 years, Eminence has significant history in the ecosystem. We believe the quick fixes and "synergies" that RBA management is pitching are fraught with unnecessary risk for RBA shareholders,” Eminence said in a letter to Ritchie’s shareholders.
Investors can read the full text of the Eminence Capital letter here.
Meanwhile, Ritchie Brothers CEO Ann Fandozzi sees the IAA acquisition speeding up the firm’s standalone strategy and $76 in share value boost from the combo.
Ritchie Bros is the world's largest industrial auctioneer, selling more equipment to onsite and online bidders than any other company in the world. The company has over 110 locations in more than 25 countries including 38 auction sites worldwide.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive