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The board behind leading taxi operator A2B Australia (ASX: A2B), which runs services 13cabs, Silver Service and Cabcharge, has unanimously backed a $182 million bid from Singapore-based transport conglomerate ComfortDelGro.
Under the agreement, ComfortDelGro’s Australian arm would acquire A2B for $1.45 per share in an all-cash deal. The suitor already holds a 9.25 per cent stake in A2B, making it one of the group’s largest shareholders.
The deal represents a 31 per cent premium to A2B’s three-month volume-weighted average share price. Due to the significant premium, the board is unanimously recommending the deal to shareholders.
Off the back of today’s news, A2B shares soared by 25 per cent to $2.24 each this afternoon.
“The A2B board has unanimously concluded that the scheme represents an outstanding outcome for all our stakeholders: shareholders, team members, over 12,000 drivers, and business partners,” A2B executive chairman Mark Bayliss says.
“I am delighted that ComfortDelGro shares the same vision for A2B and that under the scheme they intend to continue building on A2B’s strategy.
“This represents a great opportunity for our staff and drivers to continue the journey of transformation that began in 2022.”
A2B also announced it has received $78 million from the sale of 9-13 O’Riordan Street, which is a property in inner-city Sydney of Alexandria. The company will pay a fully franked dividend of 60 cents per share in late January.
Operating since 1976, A2B has become a leading supplier of personal transportation services and solutions in Australia. The 13cabs taxi network is the largest in the nation, directly supporting 10,000 vehicles and 40,000 drivers.
If the deal is to successfully go through, it will join ComfortDelGro’s global network of roughly 34,000 vehicles, which operate across Singapore, Australia, New Zealand, China, Malaysia, Ireland and the UK.
In Australia, the conglomerate already employs more than 4,800 staff, with close to 4,000 vehicles operating across six states and territories.
“ComfortDelGro Corporation Australia has a long history of providing best-in-class personalised and public transport solutions to its customers in Australia,” ComfortDelGro Corporation Australia chairman Russell Balding AO says.
“The combination of ComfortDelGro Corporation Australia and A2B represents an exciting opportunity for our customers, employees and business partners.
“We are committed to continuing to invest in the growth of A2B and ensuring additional opportunities for its skilled workforce across Australia, as well as enhancing the services available for drivers and to help customers navigate their transport needs.”
The implementation of the scheme is subject to various conditions, including A2B shareholder approval, Australian court approval, clearance from the Australian Competition and Consumer Commission, and more.
A vote for the deal is expected to take place in late March 2024.
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