Ann: Eclipx Announces Sale of Right2Drive, page-6

Interesting Article in the Murdoch papers this morning. They think MMS might be back for another takeover attempt, or possible even SIQ or SG Fleet:

Eclipx may be a takeover target again, after selling Right2Drive

Now that Australian fleet leasing company Eclipx has sold its Right2Drive business, the question is whether Eclipx itself will start fielding takeover approaches.

Market analysts say a divestment of Right2Drive to Australia-based Growth Factor Group for $26.5m paves the way for consolidation in the industry.

It is considered that Eclipx achieved a good price for the division, which had a $28m book value. Eclipx’s stock rallied 6 per cent on the news, although some suspect the gains are also due to the anticipation of further corporate activity.

The poor performance of the accident loan car provider Right2Drive was always a deterrent for a party looking to buy Eclipx. It put off McMillan Shakespeare, which was poised to buy Eclipx after making a bid in 2018 which at the time was worth around $912m.

Right2Drive was purchased four years ago by Eclipx for $67m.

Eclipx’s market value is now about $415m.

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Some point to Smart Group and McMillan Shakespeare, which has a number of government service clients, as the most likely buyers of Eclipx, although SG Fleet also made a bid for the group two years ago.

Market analysts say that synergies that exist in the industry are significant and consolidation makes increasing sense while the economy is facing tough times.

Shares in Eclipx were trading at about $1.38 on Monday afternoon. McMillan Shakespeare was at $9.21, with a market value of about $708m.