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UPDATE 1-Australia's McMillan Shakespeare to buy Eclipx Group for $662 mln

Published 08/11/2018, 01:49 pm
Updated 08/11/2018, 01:50 pm
© Reuters.  UPDATE 1-Australia's McMillan Shakespeare to buy Eclipx Group for $662 mln

(Adds details on deal, background on target, shares)

Nov 8 (Reuters) - Australian administrative services provider McMillan Shakespeare Ltd MMS.AX will buy Eclipx Group Ltd ECX.AX for an implied value of A$911 million ($661.9 million), or A$2.85 per share, in cash and stock, the companies said on Thursday.

Eclipx board recommended the offer in the absence of a superior proposal, and the deal is expected to be put to vote by shareholders in early 2019, the company said.

Each Eclipx share will fetch 0.1414 McMillan share as well as 46 Australian cents, McMillan said, valuing the share at A$2.85, based on the stocks' last closing price.

This represents a premium of about 24 percent to Eclipx' closing price on Wednesday.

In August, Eclipx cut its annual profit guidance citing sluggish auction activity at its online brand GraysOnline, making it a takeover target. cut in outlook had then sent the stock to a record low.

The chief executive and chief financial officer of McMillan will retain their respective roles in the merged entity, the companies said.

McMillan Shakespeare shares fell 5 percent to A$16.06, while Eclipx rose more than 15 percent to A$2.66. The broader index .AXJO was up 0.5 percent ($1 = 1.3763 Australian dollars)

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