Ritchie Bros shareholder Vontobel reverses view, now favors IAA deal

TORONTO, March 2 (Reuters) - Vontobel Asset Management, a Ritchie Bros Auctioneers shareholder, said it now supports the company's planned $6 billion buyout of vehicle salvage company IAA Inc after saying last month it had concerns about the deal.

Vontobel Asset Management owns 2.15% of Ritchie Bros shares and 0.23% of IAA rival Copart Inc, according to U.S. filings compiled by Refinitiv.

"The hurdles posed by the deal can be overcome if the combined entity can deliver synergies to Ritchie Bros' operations, which we have come to appreciate incrementally more with further engagement with the company," Chul Chang, a Vontobel portfolio manager, said in an email.

Chang told Reuters last month that the deal adds risk to Ritchie Bros because IAA had been a weakening asset relative to the larger Copart.

Last year, Canada-based Ritchie agreed to buy IAA for $6 billion. In January, the company, which auctions used heavy equipment and trucks, received $500 million from investment firm Starboard, allowing it to revise the terms of the deal to include more cash.

In February Ancora, which holds a 4% stake in IAA, said it had accumulated a 0.5% stake in Ritchie Bros and reiterated its support for the deal.

Ritchie Bros and IAA shareholders are due to vote on the deal at special meetings on March 14. United First Partners, a research firm that focuses M&A, said in a note on Thursday that with Ritchie Bros management "IAA will be able to better compete against (Copart) and pivot more quickly in future strategic actions."

Proxy advisers Institutional Shareholder Services Inc (ISS) and Glass Lewis are expected to soon make recommendations on how shareholders should vote on the proposed acquisition.

United First Partners assigned a 70% probability that ISS and Glass Lewis will recommend the deal.

Investment firm Luxor Capital Group, which holds a 4.2% stake in Ritchie Bros, has been a vocal opponent of the deal.

Ritchie Bros shareholders Eminence Capital, Deep Field Asset Management and Janus Henderson Investors have opposed the merger, while Discerene Group LP, which holds a 3.6% stake in IAA, also said it plans to vote against it.

Eagle Asset Management and Independent Franchise Partners have supported the deal. (Reporting by Maiya Keidan; Editing by Steve Scherer and Bill Berkrot)