Tiger Automotive Offer Supported by 64.5% of Shareholders

According to media in South Africa, Tiger Automotive has declared that 64.5 per cent of shareholders had given a firm undertaking to vote in favour of the R1.05 billion (£76 million) offer made by Ethos Private Equity on December 12. To go ahead the transaction needs to approved by at least 75 per cent of shareholders and by antitrust authorities.

“TiAuto shareholders representing approximately 64.8 per cent of the shares eligible to vote at the scheme meeting have furnished irrevocable undertakings to vote in favour of the scheme,” Tiger Automotive said in a statement. The company added that it would not actively seek any rival offer while the Ethos offer remained on the table.

One analyst, quoted in South Africa’s Business Day newspaper, cautioned that shareholders were not being offered a high enough price, claiming that Tiger Automotive was “a cash-generating cow with good future growth prospects” and likely healthy future dividends.

“I don’t think this is a good price for a good cash-generating company such as Tiger Automotive — it is a short sighted approach,” said Francesco Sturino, an analyst at BP Stockbrokers. “The record sales of cars in the past five years presents the company with good future growth prospects. The number of cars on the road means a record number of cars will be changing tyres, which means cash for the company.”