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Bapcor (ASX:BAP) share price falls on rejected takeover offer

The Bapcor Ltd (ASX:BAP) share price is in focus after the auto parts business announced it had rejected a takeover offer and appointed a new leader.

The Bapcor Ltd (ASX: BAP) share price is in focus after the auto parts business announced it had rejected a takeover offer and appointed a new leader.

Bapcor is an auto parts company which includes brands such as Autobarn, Autopro, Burson and Midas.

Takeover bid rejected

The ASX company announced to the market that it had decided to reject the unsolicited, indicative, conditional and non-binding proposal from Bain Capital Private Equity in June 2024. That offer was to buy the entire Bapcor business for $5.40 cash per Bapcor share.

Bapcor’s board said it considered the Bain offer and the outlook for Bapcor in detail.

The board concluded that the offer “does not represent fair value for Bapcor, is not in the best interests of Bapcor shareholders and therefore has rejected the Bain proposal.”

New leader appointed

In a separate ASX announcement, Bapcor said Angus McKay has been appointed as the executive chair and CEO of the business, starting 22 August 2024.

McKay has over 30 years of executive experience. The most recent being the leader of 7-Eleven Australia since 2016, where he “improved profitability by embedding strong financial control and operational discipline as well as transforming culture and sustainability practices.”

He was also previously the CEO of ASX businesses The Skilled Group and Asciano Limited.

The Bapcor Chair Margie Haseltine said:

Angus is a proven leader with extensive experience. Throughout his career he has brought a strategic approach to expansion and operational efficiency.

Along with his focus on cultural change, Angus is well placed to drive results in Bapcor’s strategic endeavours and in turn for Bapcor’s shareholders.

Haseltine re-iterated that she does not intend to seek re-election to the Bapcor board at the 2024 AGM.

Earnings update

Bapcor also reconfirmed that pro forma (underlying) net profit is expected to be between $93 million and $97 million.

The company’s statutory net profit will include charges related to the impairment of tangible and intangible assets in the retail business and one-off costs to “further rationalise the distribution network.” The size of these charges will be confirmed as part of the year-end process.

Bapcor said it remains confident in the long-term outlook for the group and the resilience of the auto aftermarket industry as evidenced by the “continued growth in sales” in its two largest segments being trade and specialist wholesale.

Management seem confident enough about the future to reject the offer, so the company will need to justify that decision in the next few years. With the current difficult economic environment, I wouldn’t call the Bapcor share price a big bargain considering it jumped after the takeover offer in June.

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