Cambria Automobiles chief executive Mark Lavery has dismissed angry US-based shareholders’ allegations that his £82.5 million takeover bid for the car retail PLC is akin to “stealing”.
Investment fund managers from across the Atlantic claim that the 82.5p per share offer made through Lavery’s Bidco takeover business entity represents poor value for a company which has freehold property portfolio believed to be worth in excess of £100 million.
And they have alleged that Cambria has failed to issue recent trading updates – like fellow PLCs Inchcape, Lookers, Marshall and Vertu – in a bid to mask its post-lockdown recovery and potential for value growth.
One such shareholder, Benjamin Hart, told AM: “I don’t like being stolen from and I think that’s what’s happening here.
“The offer being presented to shareholders does not represent good value. It’s a poor deal and the independent panel should not be recommending that it is accepted.”
But Lavery has vehemently denied the accusation and said shareholders look to make millions from Cambria's return to private ownership.
“Cambria’s average share price over the past five years has been 49p to 51p,” Lavery told AM.
“When we started this process the share price was at 33p and when the business was first listed it was at 50p.
“At 82.5p per share the price we are offering shareholders is 66.6% above the mean price over the past 12 months.
“This is a fair and reasonable offer that gives people the opportunity to cash out.
“We’ve also given the opportunity to take a stake in the new business, although I appreciate that in certain overseas territories that opportunity is not available to shareholders.”
Lavery’s bid for Cambria was shifted to a takeover offer at the end of last month, as he tabled an improved offer of 82.5p per share (previously 80p).
The offer now needs acceptances from a minimum of 75% of shareholders for it to succeed and has so far reached 65.8%.
Lavery, a 40% majority stakeholder, told AM that he wants to see the business returned to private ownership to better focus its attentions on the challenges posed by the shift to electrification and the introduction of agency model franchise agreements, which he fears may render certain dealership facilities “obsolete”.
He said: “Over the past 11 years we have employed stockbrokers and market analysts and dedicated millions of pounds and hundreds of man hours to let the market know about the business we built.
“Cambria doesn’t set the share price, the shareholders do, and the truth is that they just haven’t got it. The value that we see in the business has not been realised.
“I feel like I’m wasting my time and a lot of money.”
Lavery said that funding Bidco’s takeover offer for Cambria had “not been easy”, explaining that the cash had been generated from a combination of bank debt and £2.5m of personal funds.
He said “I am taking all the risk now”, adding: “My priority here is the business, its colleagues, our manufacturer partners and the shareholders.
“We’re entering a challenging period for the sector and going private will allow us to focus on what lies ahead with any distractions.”
The US shareholders who oppose Lavery’s takeover have said that they will continue to scrutinise the offer and derail the plan, if possible, however.
One shareholder who spoke to AM suggested that the takeover process had been built on the threat of leaving shareholders with unlisted and illiquid shares if they do not accept its terms.
“We’ll continue to look closely at the terms of the offer document and see what can be done,” he said.