2 Bids for Bapcor

AS reported in The Australian today, Bapcor received two unsolicited buyout proposals since December.

I reckon the Board would set a minimum price of $10 per share.

Bapcor is one of the few lisred retailers that has the ability to pass through price increases and as Australians are shunning public transport and holidaying locally rather than overseas the growth prospects for Bapcor are enticing.

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Two Bapcor bids as suitors circle


Bapcor, which runs the Autobarn, Autopro and Burson retail chains, was listed with a market capitalisation of $300m.

• BRIDGET CARTER
  DATAROOM EDITOR
  @BridgetCarterb
  
• 6:00PM FEBRUARY 6, 2022
• NO COMMENTS

Bapcor is understood to have received two buyout proposals since December.
DataRoom has learned that a private equity firm and an overseas company have been circling the $2bn-plus automotive aftermarket parts provider and are believed to have made approaches, although the company’s spokesperson said its board had not received any bids.

The situation will no doubt be explored when Bapcor reports its half-year results on February 9.
Bapcor has lost more than $400m in market value since November, when its shares were around $8.30. On Friday it closed at $6.93 with its market value at $2.3bn.

The pandemic has had a mixed impact on Bapcor, with solid demand from consumers unable to travel overseas offsetting higher shipping costs for parts.

Some think the suitors made offers between $8 and $9 per share, which the board would be unlikely to accept given that is what the company was worth only three months ago.

Sources believe former CEO Darryl Abotomey could be behind at least one of the proposals.
Abotomey departed abruptly in December after a decade in the top job. He was at the helm when it transitioned from Quadrant Private Equity’s ownership to the listed market in 2014, then known as Burson Auto Parts.

After initially telling the market Abotomey would retire on February 28, Bapcor later said his departure was imminent due to “a marked deterioration in the relationship between the board and the CEO”.
Bapcor’s shares crashed about 18 per cent in the days after the announcement on November 23.

At the time, this column reported that the seasoned chief executive was held in high regard by several investors and they were lobbying the board for him to remain at the helm, as the board carried out a review of culture.

Market analysts had earlier said Bapcor was an expensive stock. The plunge in its share price was expected to prompt buyout funds to look at the business as the return of cars to the roads following lockdowns pointed to higher earnings in the months ahead.

The view then was that a bid would be seen as opportunistic and would not gain approval.

Private equity firms are cashed-up, with local operators such as BGH Capital and Quadrant recently raising for new funds and Pacific Equity Partners set to do so after a string of exits in recent months.
Bapcor, which runs the Autobarn, Autopro and Burson retail chains, was listed with a market capitalisation of $300m.

Net profits rose 47 per cent to $130m in the year to June 30. The company employs 5000 staff and has more than 1000 outlets.

Under Abotomey, Bapcor expanded into Asian markets.
BRIDGET CARTER
DATAROOM EDITOR