AP Eagers Ltd (ASX: APE) has just sent the Automotive Holdings Group Ltd (ASX: AHG) share price into the atmosphere.
A.P. Eagers is Australia’s oldest listed automotive retail group, it has been going for over a century. It operates automotive dealerships across Queensland, South Australia, New South Wales, Victoria, Northern Territory and Tasmania. It has over 4,500 employees.
Why A.P. Eagers Sent The AHG Share Price Rocketing
As my colleague Andrew Schonberger has already outlined, AP Eagers has lobbed a takeover bid for AHG, one of the other large dealership businesses in Australia.
The all-share offer is 1 AP Eagers share for every 3.8 AHG shares owned. AP Eagers said that the likelihood of a competing proposal is low because AP Eagers already owns nearly 30% of the target company.
The offer price implies a 7.63% premium at the closing prices yesterday.
The idea behind the bid is that the pre-tax synergies between the two businesses are estimated to be $13.5 million if full ownership is achieved.
The AP Eagers share price is up 6.1% and the AHG share price is up 14% at lunch. AHG plans to assess the takeover.
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