Rushni Nair and Aaditya GovindRao
(Reuters) – Private equity firm Bain Capital has offered to buy Australia’s Bapcor for A$1.83 billion ($1.21 billion), in a move analysts say could attract more suitors to the struggling auto parts retailer.
Bapcor said on Tuesday its shareholders will receive A$5.4 per share in cash under the terms of a non-binding indicative offer, representing a 23.9% premium to the shares’ last closing price of A$4.36 on June 7.
Bapcor shares, which had fallen 21% this year to Friday’s close, rose 14.9% to A$5.010 as of 0209 GMT. The stock was the top gainer on the benchmark index, down 1.4%.
“The automotive aftermarket is becoming increasingly global. We believe Bapcor will offer potential acquirers a strong position in the Asia-Pacific region,” Ord Minnett analysts wrote in a note.
“It is therefore possible that the private equity offer could attract attention to Bapcor from other major industry players in offshore markets.”
Bain Capital declined to comment.
Citi analysts said the proposal “comes at an opportunistic time when governance and management were suboptimal.”
“We are not surprised by Bain’s offer as we believe Bapcor is a good company in a favorable industry,” it said.
In May, Bapcor noted challenging trading conditions for retail performance and concerns over competitive pricing, leading to lower volumes and margins amid higher costs.
The company warned at the time that profits in the second half of 2024 would be lower than in the first half. In late April, Bapcor announced that Paul Dumbrel would not be joining the company as its chief executive.
($1 = 1.5135 Australian dollars)