UPDATE 1-Shareholders of Canada's Ritchie Bros support deal with IAA
(Adds deal details, background, shares)
March 14 (Reuters) - Canada's Ritchie Bros Auctioneers said on Tuesday its shareholders voted in favor of its $7 billion acquisition of U.S. auto retailer IAA Inc, according to a preliminary tally.
The cash-and-stock deal,
first announced
in November, has become one of the year's most
contested
in the United States.
Ritchie's shareholders including Luxor Capital Group and Eminence Capital had opposed the deal.
Proxy advisory firms Institutional Shareholder Services and Glass Lewis also recommended that shareholders reject the deal, citing potential risks. However, proxy firm Egan-Jones Proxy Services earlier this month recommended to vote for the deal.
Ritchie Bros on Jan. 23 sweetened the cash component of its buyout offer for IAA by 28%, valuing the U.S. auto retailer at $5.94 billion, and also secured the backing of a key IAA shareholder who had questioned the initial offer.
IAA stockholders will receive $12.80 per share in cash and 0.5252 common shares of Ritchie Bros for each share of IAA common stock they own.
Upon completion of the deal, IAA stockholders will own 37.2% of the combined company and Ritchie Bros shareholders the remaining 62.8%.
For Ritchie Bros, which auctions and sells used heavy industrial equipment, the acquisition is intended to diversify its customer base, giving it a bigger footprint in vehicle re-marketing, and help cut costs.
On Tuesday, shares of IAA were up 1.8% at $40.9, while U.S.-listed stock of Ritchie Bros was up 0.7% at $54.8. (Reporting by Aishwarya Nair and Kannaki Deka in Bengaluru; Editing by Devika Syamnath and Maju Samuel)
