- Ritchie Bros. Auctioneers Inc RBA has changed the terms of its acquisition proposal of IAA Inc IAA, increasing the cash consideration to IAA shareholders.
- Under the terms of the amended agreement, IAA shareholders will receive $12.80 per share in cash and 0.5252 common shares of Ritchie Bros. for each share of IAA common stock they own.
- The change in consideration mix represents a shift in the cash/stock mix to approximately 29% cash/71% stock from the previous mix of 22% cash/78% stock.
- The amended agreement has been unanimously approved by each company's Board of Directors.
- Also, Ritchie Bros. Board of Directors expects to approve the issuance of a one-time special dividend to Ritchie Bros. shareholders of $1.08 per common share.
- In November 2022, Ritchie Bros. agreed to acquire IAA in a stock and cash transaction valued at $7.3 billion, including $1.0 billion net debt.
- "We are pleased to have reached an amended agreement with IAA, which reflects feedback we've received from shareholders regarding the best structure for the transaction," said CEO Ann Fandozzi.
- In addition, Ancora Alternatives has agreed to vote its shares, representing 4% of IAA's voting power, in favor of the revised transaction. Tim O'Day is expected to be appointed to the Ritchie Bros. Board as one of the four IAA board designees.
- Strategic Investment: In a separate release issued this morning, Ritchie Bros. announced that it has entered into a securities purchase agreement with Starboard Value LP.
- Starboard will make a concurrent $485 million convertible preferred equity and $15 million common share investment in Ritchie Bros.
- Starboard is fully supportive of the acquisition of IAA by Ritchie Bros., however, Starboard's investment will not vote at the Special Meeting of Shareholders.
- In connection with the investment, Starboard CEO Jeffrey Smith will be appointed to the Ritchie Bros. Board.
- Price Action: RBA shares are trading higher by 2.79% at $61.85 and IAA is up 6.59% at $43.33 on the last check Monday.
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