The board of Automotive Holdings Group (ASX: AHG) has welcomed an improved takeover offer from AP Eagers (ASX: APE).
Now, the offer has been increased to one AP Eagers share for every 3.6 AHG shares held.
"The AHG Board unanimously recommends AHG shareholders accept the improved offer, in the absence of a superior proposal," says AHG.
If the deal goes through the merged group of two of Australia's largest automotive dealers will have a market capitalisation of $2.3 billion, and existing AHG shareholders would own 25.5 per cent of the new entity.
"Having regard to the increased value for AHG shareholders and the reduced conditionality, the board of AHG believes that the improved offer is in the best interests of AHG shareholders," says AHG chairman Richard England.
"The improved offer provides AHG shareholders with the opportunity to continue their exposure to any future growth in AHG's earning and value and, if sufficient AHG shareholders accept the improved offer, the financial and strategic benefits that are expected to accrue to the merged group."
The merger to create what will be a major powerhouse in Australia's automotive sales still requires shareholder approval, as well as ACCC and third-party approvals.
AP Eagers has previously indicated that a merger of the two companies could result in the merged entity looking at new business angles like ride sharing and subscription services.
Shares in AP Eagers are up 0.55 per cent to $9.08 per share as the market opens on Wednesday.
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support