Australia’s Bapcor receives $1.2 billion offer from Bain Capital By Reuters
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Australia’s Bapcor receives $1.2 billion offer from Bain Capital By Reuters

By Roushni Nair and Aaditya GovindRao

(Reuters) – Private equity firm Bain Capital has offered to acquire Australia’s Bapcor for A$1.83 billion ($1.21 billion), which analysts say could attract attention from more suitors on the struggling auto parts retailer.

Bapcor said on Tuesday its shareholders would receive A$5.4 in cash per share under the terms of the non-binding indicative proposal, representing a 23.9% premium to the stock’s last close of 4, 36 Australian dollars on June 7.

Bapcor shares, which had fallen 21% this year as of Friday’s close, were up 14.9% at A$5.010 at 0209 GMT. The stock was the biggest gainer on the benchmark index, falling 1.4%.

“The automotive aftermarket is becoming increasingly globalized. In our view, Bapcor would offer potential suitors a strong position in the Asia-Pacific region,” Ord Minnett analysts said in a note.

“As such, it is possible that the private equity offering will attract attention to Bapcor from other major industry players in offshore markets.”

Bain Capital declined to comment.

Citi analysts said the offering “comes at an opportunistic time where governance and management have not been optimal.”

“We are not surprised by Bain’s offer given that we view Bapcor as a good company, operating in a favorable industry,” they said in a note.

Bapcor reported challenging trading conditions for retail performance and concerns over competitive pricing in May, leading to volume and margin pressures amid higher costs.

© Reuters.  FILE PHOTO: The Bain Capital logo is displayed on screen during a news conference in Tokyo, Japan October 5, 2017. REUTERS/Kim Kyung-Hoon/File Photo

The company then warned that profits for the second half of 2024 would be lower than those for the first half. In late April, Bapcor said Paul Dumbrell would not join the company as chief executive.

($1 = 1.5135 Australian dollars)