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SG Fleet readies opportunistic play for Eclipx Group: sources

Aug 19 2018 at 10:08 PM

Street Talk understands SG Fleet has been running the numbers on the fleet management and consumer finance business, and is ready to pull the trigger on a cash bid pegged at about a 30 per cent premium to Eclipx's last close.


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  • 1 month later...

Updated chart and, FWIW, Morgan Stanley's revised target


Morgan Stanley rates ECX as Overweight


Morgan Stanley suggests the stock has rebounded on the back of SG Fleet's ((SGF)) offer at $2.52 a share. The broker suspects the bid was a catalyst for the market to ascribe value to Right2Drive and Grays.


Morgan Stanley values the core leasing business at $2.50 a share and now includes $0.50 a share for Right2Drive and Grays. The broker maintains an Overweight rating and raises the target to $3.00 from $2.50. Industry view is In-Line.


MS's target of $3.00 not far way from the $3.04 where it fell off the cliff


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Street Talk understands there is a party in Eclipx's data room.


The most obvious candidate is spurned suitor SG Fleet, which has since had its bankers meet Eclipx, although other fleet managers are known to have acquisition ambitions of their own.


Eclipx declined to comment when contacted by Street Talk on Wednesday.


Takeover target Eclipx Group lays low as suitor circles

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AFR "sources" correct - McMillan Shakespeare and Eclipx merger

Transaction highlights

McMillan Shakespeare Limited ("MMS", ASX: MMS) to merge with Eclipx Group Limited ("Eclipx", ASX: ECX) via

Eclipx scheme of arrangement


Scrip and cash: 0.1414 MMS shares and $0.46 cash offered for each Eclipx share held, implying a total value of

$2.85 per Eclipx share based on MMSÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ last closing price of $16.90 on Wednesday, 7 November 2018


The consideration represents a 33.2% premium to EclipxÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s undisturbed price of $2.14 on Friday, 17 August 20181


Creates a leading Australian and New Zealand salary packaging and fleet management company


Approximately $50 million in EBITDA run-rate synergies per annum expected to be fully realised within three years

following full integration


Expected to be EPS accretive pre synergies


Three Eclipx directors to join the MMS Board


Mike Salisbury and Mark Blackburn to continue as CEO and CFO respectively


Senior management of both MMS and Eclipx to participate as Executives of the Combined Group


The scheme is expected to be implemented in Q1 2019


The merger is unanimously recommended by the Board of Eclipx, in the absence of a superior proposal and

subject to an independent expert concluding that the merger is in the best interests of the Eclipx shareholders


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  • 4 months later...



Eclipx has resumed trading with a 54 per cent drop in the share price to 89 cents, wiping off $320 million from its market capitalisation.


Major shareholders like Yarra Funds Management, the largest shareholder with 9 per cent, Pendal Group, Vinva Investment Management, and Bennelong Funds Management are not going to like this result.


Up until this morning they thought they were going to get 0.1414 McMillan Shakespeare shares plus 46 cents cash for every Eclipx share in a new $2.14 billion company.


Meanwhile the market is rewarding McMillan Shakespeare for walking away from the Eclipx purchase with a 4.9 per cent rise to a four-week high of $13.37.


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