Bain Capital eyeing embattled Bapcor for a potential $1.8b takeover

Bain Capital eyeing embattled Bapcor for a potential $1.8b takeover

Photo: Autobarn, via Facebook

Bapcor (ASX: BAP) has confirmed that Bain Capital Private Equity is looking to acquire the embattled automotive parts retail group after it put forward a non-binding offer ahead of the long weekend valuing the company at more than $1.8 billion.

Bapcor, which owns high-profile retail brands Autobarn, Autopro, Midas and ABS, says it received the offer after the share market closed last Friday, noting that is an unsolicited bid.

Bain Capital, which notably swooped on Virgin Australia in a $3.5 billion buyout as the airline fell into administration four years ago, is capitalising on weakness in the current Bapcor share price to offer shareholders a healthy premium to acquire the company.

The private equity group has indicated it is prepared to pay $5.40 per share for a 100 per cent interest in Bapcor, which is a 23.8 per cent premium to the company’s closing price of $4.36 last Friday.

However, the offer price still values Bapcor at least $200 million less than its market capitalisation of $2.03 billion in April when it traded at an average close of just under $6 per share. 

“Bapcor is disclosing receipt of the indicative proposal in advance of the board concluding its assessment of the indicative proposal,” says Bapcor in a statement to the ASX today.

“The board cautions that at this time there is no guarantee that the indicative proposal put forward by Bain Capital will result in a binding offer or that any transaction will eventuate.”

Bapcor notes that the proposal is subject to multiple conditions, including due diligence, unanimous board approval and regulatory approvals, including a green light from the Foreign Investment Review Board.

Bapcor shares were sharply higher this morning but nowhere near the Bain Capital Private Equity indicative offer price. The shares were trading at $4.90, up 54c or 12 per cent, at 10.08am (AEST).

Bapcor’s stock has been languishing at four-year lows this past month led by a number of factors including weaker consumer sentiment in the current half year, hitting profitability.

The company’s woes have been compounded by a leadership vacuum following the shock departure of Noel Meehan earlier this year and the double blow of his replacement, industry veteran Paul Dumbrell, making a last-minute call in April to withdraw from the appointment.

Bain Capital’s move on Bapcor comes amid ongoing plans by the US-based private equity group to offload its investment in Virgin via an IPO. Those plans are still up in the air with an ASX listing complicated by the departure in February of CEO Jayne Hrdlicka who oversaw the airline’s return to profitability in 2023.

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