FleetPartners Group Ltd (ASX:FPR) shares surged 11% to $3.85 after the company rejected a $3.60-per-share takeover proposal from SG Fleet and revealed it had received a higher indicative offer from Canadian rival Element Fleet Management Corp.
The FleetPartners board unanimously rejected SG Fleet’s indicative, non-binding and conditional proposal, saying it undervalued the company and was not in shareholders’ best interests.
However, FleetPartners is now considering a separate non-binding and indicative proposal from Element to acquire 100% of the company through a scheme of arrangement for $3.80 per share in cash.
Element has also proposed increasing its offer to $4.00 per share if FleetPartners enters an acceptable process deed — including a 3-week exclusivity period — by 5pm AEST on Tuesday, August 11.
Shares trade above base Element offer
FleetPartners’ rise to $3.85 puts the stock above Element’s initial $3.80 indicative offer price, but below the potential $4.00 enhanced proposal.
The market reaction comes as investors weigh the prospect of a higher-priced transaction or further competitive tension around the company.
Element has indicated that neither its $3.80 nor $4.00 offer would be increased in the absence of a superior proposal. Its proposal remains subject to conditions including due diligence, agreement on a scheme implementation deed and regulatory approvals from the Foreign Investment Review Board and Australian Competition and Consumer Commission.
Board considers Element proposal
FleetPartners said its board and advisers were evaluating Element’s approach and would update shareholders in due course.
Importantly, the company remains able to consider and engage with other parties, including SG Fleet, over alternative proposals that the board determines may be in shareholders’ interests.
There is no certainty that either the Element or SG Fleet proposals will result in a binding offer or completed transaction, and shareholders have been advised that no action is required at this stage.