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A BOLD move to amalgamate eight Australian businesses supplying products and services to 4WD consumers appears to have come to an end with the ASX-listed Automotive Solutions Group Ltd (ASGL) now capitulating to a takeover bid.

ASGL – which listed on December 21, 2016 with founder, 4WD enthusiast and financial expert Tanya Mason at the helm – this week issued a notice to its shareholders to accept the on-market bid by AMA Group Ltd.

ASGL had merged the businesses of eight 4WD specialists in 11 locations around Australia that traded through 250 retailers.

AMA Group has a similar business model to ASGL, including a group of 16 automotive aftercare and accessory companies taking in Gemini smash repair, ECB alloy bullbars, Allanco electrical services and FluidDrive component manufacturing.

ASGL chairman Dr Ken Carr said the offer of 35 cents per ASGL share by AMA should be accepted because it was a “fair and reasonable” price; that there were no other offers and no others anticipated; and there was no certainty that the shares would trade above this figure in the near future.

He said there was also the possibility of ASGL being delisted once AMA achieved control of more than 90 per cent of ASGL shares.

Dr Carr also revealed that ASGL needs further cash to continue operating. He said it has had to borrow money from the company that was taking it over – and in earlier months that was a bitter situation – “to pay pending tax liabilities”.

AMA director Ray Smith-Roberts told GoAutoNews Premium that ASGL has “good businesses that fit our strategic vision”.

“We have a diversified business as well in manufacturing and remanufacturing and so there are synergies that exist,” he said.

“We could partner up and integrate these business and we’ll see over the next few weeks if this can work.

“In exactly what form the business integration would take, I can’t yet say. When we get a clearer vision of what ASGL has then we can see the opportunities to make it work.”

ASGL has had significant upheavals since it listed a year ago. The current board has only been in place for one month.

In April this year it warned shareholders of a reduced earnings forecast. Then on May 5, it reported that it had completed a review of the company and that founder Ms Mason had stepped down as managing director and CEO.

Three days later AMA Ltd announced it had bought ASGL shares on market and had accumulated 17.77 per cent of the company.

ASGL made further changes to the board, with non-executive director Bryce Wedemeyer becoming chief operating officer. At the same time, the board said that it was in disagreement with one of the company’s eight business units.

Then on August 29, following a slow recovery from a major operation, Tom Phillips (former chief of Mitsubishi Motors Australia Ltd) stepped down from the chair and Peter Alexander was placed at the top of the table.

A further board change on October 27 saw a new CFO, new chairman with Dr Ken Carr replacing Mr Alexander, Bryan Granzien becoming CEO and Chris Downie being admitted to the board.

By Neil Dowling

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