Ritchie Bros shareholder Vontobel reverses view, now favors IAA deal

Copart

02/03/2023 22:28

TORONTO, March 2 (Reuters) - Vontobel Asset Management,
a Ritchie Bros Auctioneers  RBA.TO  shareholder, said it now
supports the company's planned $6 billion buyout of vehicle
salvage company IAA Inc  IAA.N  after saying last month it had
concerns about the deal.
    Vontobel Asset Management owns 2.15% of Ritchie Bros shares
and 0.23% of IAA rival Copart Inc  CPRT.O , according to U.S.
filings compiled by Refinitiv.
    "The hurdles posed by the deal can be overcome if the
combined entity can deliver synergies to Ritchie Bros'
operations, which we have come to appreciate incrementally more
with further engagement with the company," Chul Chang, a
Vontobel portfolio manager, said in an email. 
    Chang told Reuters last month that the deal adds risk to
Ritchie Bros because IAA had been a weakening asset relative to
the larger Copart.
    Last year, Canada-based Ritchie agreed to buy IAA for $6
billion. In January, the company, which auctions used heavy
equipment and trucks, received $500 million from investment firm
Starboard, allowing it to revise the terms of the deal to
include more cash.
    In February Ancora, which holds a 4% stake in IAA, said it
had accumulated a 0.5% stake in Ritchie Bros and reiterated its
support for the deal.
    Ritchie Bros and IAA shareholders are due to vote on the
deal at special meetings on March 14.
   United First Partners, a research firm that focuses M&A, said
in a note on Thursday that with Ritchie Bros management "IAA
will be able to better compete against (Copart) and pivot more
quickly in future strategic actions."
    Proxy advisers Institutional Shareholder Services Inc (ISS)
and Glass Lewis are expected to soon make recommendations on how
shareholders should vote on the proposed acquisition.
    United First Partners assigned a 70% probability that ISS
and Glass Lewis will recommend the deal.
    Investment firm Luxor Capital Group, which holds a 4.2%
stake in Ritchie Bros, has been a vocal opponent of the deal.
    Ritchie Bros shareholders Eminence Capital, Deep Field Asset
Management and Janus Henderson Investors have opposed the
merger, while Discerene Group LP, which holds a 3.6% stake in
IAA, also said it plans to vote against it.
    Eagle Asset Management and Independent Franchise Partners
have supported the deal.

 (Reporting by Maiya Keidan; Editing by Steve Scherer and Bill
Berkrot)
 ((Maiya.Keidan@thomsonreuters.com; 44 207 542 1594; Reuters
Messaging: maiya.keidan.thomsonreuters.com@reuters.net))