Ancora secures Ritchie Bros stake, challenges investors opposing $6 bln IAA deal
08/02/2023 12:00
By Svea Herbst-Bayliss
NEW YORK, Feb 8 (Reuters) - Ancora Group Holdings, a key
shareholder in U.S. auto retailer IAA IAA.N , has accumulated a
0.5% stake in Canada's Ritchie Bros Auctioneers RBA.TO and is
publicly challenging investors who oppose their planned merger,
according to documents seen by Reuters.
Activist investor Ancora, which has successfully pushed for
change at companies including retailer Kohl's KSS.N and
toymaker Hasbro HAS.O , last month threw its weight behind the
tie-up after Ritchie Bros amended the terms.
Ritchie Bros recut the deal, valued at nearly $6 billion, to
include more cash for IAA shareholders and reduced the dilution
for Ritchie Bros shareholders.
Activist investment firm Starboard Value LP agreed to make a
$500 million preferred investment in Ritchie Bros and the firm's
chief, Jeffrey Smith, will join the board. Ancora will also have
its representative on the combined board.
Shareholders of both companies have to approve the deal at
special meetings on March 14.
In the coming days both sides will present their case to
proxy advisory firms ISS and Glass Lewis, which will make
recommendations on how shareholders should vote.
In the presentation seen by Reuters, Ancora supported
Ritchie Bros chief Ann Fandozzi and took aim at hedge fund Luxor
Capital Group, a vocal opponent of the deal.
Luxor has said the deal it would distract Richie Bros
from its core business of selling heavy equipment and hurt
shareholders.
Ancora called Luxor's analysis "misinformed" and said its
interests were "seemingly misaligned". Ancora noted that
Luxor's Ritchie Bros stake doubled over the past three months
while "short interest in IAA was increasing in parallel."
This week, Luxor disclosed in a regulatory filing an
agreement with hedge fund Fir Tree Capital Management LP that
entitles it to a "trade incentive fee" pertaining to investments
in the auto companies.
Fir Tree has become a prominent short seller and last year
made a public bet against crypto coin Tether.
Representative for Luxor and Fir Tree could not be
immediately reached for comment.
In recent weeks, shareholders on both sides of the deal have
expressed their views. Janus Henderson Investors has come out
against the deal while Eagle Asset Management and Independent
Franchise Partners have lined up alongside Ancora to support it.
Ancora's hedge fund unit, led by James Chadwick, has become
a top activist investor in recent years. In 2022, it secured
board seats at C.H. Robinson Worldwide CHRW.O , Mueller Water
Products MWA.N and Berry Global BERY.N and pushed IAA to
sell itself.
(Reporting by Svea Herbst-Bayliss; Editing by Jamie Freed)
((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))