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AHG announces merger update

The Board of Automotive Holdings Group (AHG) has unanimously recommended that AHG shareholders accept AP Eagers’ (APE) improved offer.

In a joint statement dated 7 May, APE agreed to vary its all-scrip offer to acquire the ordinary shares in AHG it does not already own by increasing the consideration offered from 1 APE share for every 3.8 AHG shares (initial offer) to 1 APE share for every 3.6 AHG shares (improved offer).

Assuming AHG and AP Eagers are fully combined, the merged group is expected to have a pro forma market capitalisation of approximately $2.3 billion, and existing AHG shareholders (other than APE) and APE shareholders would own 25.5 per cent and 74.5 per cent of the merged group respectively.

AP Eagers and AHG have entered into an implementation deed, under which
the AHG Directors have agreed to unanimously recommend that AHG shareholders accept the improved offer, in the absence of a superior proposal, and that they should accept once APE waives the no MAC bid condition in the manner contemplated in the implementation deed.

“We are delighted the AHG Board shares our view on the logic and benefits of bringing the two companies together to create Australia's leading automotive group,” said APE Chairman, Tim Crommelin.

“We look forward to working with the AHG team to satisfy the remaining conditions of the Offer, including obtaining ACCC and third party
approvals, as quickly as possible in order to deliver the best outcome for shareholders in the merged group,” he said.

“Having regard to the increased value for AHG shareholders and the reduced conditionality, the Board of AHG believes that the improved offer is in the best interests of AHG Shareholders, in the absence of a superior proposal,” said AHG Chairman, Richard England.

“The improved offer provides AHG shareholders with the opportunity to continue their exposure to any future growth in AHG’s earnings and value and, if sufficient AHG shareholders accept the improved offer, the financial and strategic benefits that are expected to accrue to the merged group,” he said.

The current closing date of the improved offer is 7pm on 16 September 2019.

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