The market has applauded Burson Group Ltd's (ASX: BAP) latest acquisition, bidding the stock as much as 11.5% higher early in the session to an all-time high of $3.79.
Burson's shares have been stuck in a trading halt since Monday morning when the automotive aftermarket parts business announced the acquisition of Metcash Limited's (ASX: MTS) Automotive Division.
Burson will pay $275 million for the business, which compares to the $350 million Metcash had initially wanted and the $460 million Credit Suisse believed it could be worth, as highlighted by the Fairfax press.
Metcash's Automotive Division, which includes brands such as Autobarn, Autopro, Midas, Carparts and ABS, will enhance Burson's do-it-yourself (DIY) and do-it-for-me (DIFM) offerings whilst also strengthening its national network. It's equally as great that those businesses didn't fall into the hands of a rival for the same price (which could have significantly increased competitive risks for Burson).
This morning, Burson announced that it had completed the institutional component of its 7-for-15 accelerated renounceable entitlement offer. Burson said there was a 96% takeup on the offer, raising approximately $160 million.
The retail component of the entitlement offer, which opens on 23 June and closes on 6 July, is expected to raise a further $58 million with eligible shareholders also able to subscribe for 7 new shares for every 15 shares currently held, at a price of $2.85 per share. That represents a massive 33% discount to today's price.
