People look at industrial equipment during the Ritchie Bros. auction in Nisku, Alta., Tuesday, April 26, 2016. A report by Institutional Shareholder Services recommends shareholders of Ritchie Bros. Auctioneers Inc. vote against the company's deal to buy automotive salvage company IAA Inc. THE CANADIAN PRESS/Codie McLachlan
VANCOUVER – A report by Institutional Shareholder Services recommends shareholders of Ritchie Bros. Auctioneers Inc. vote against the company’s deal to buy automotive salvage company IAA Inc.
The proxy advisory services firm says it believes the potential risks associated with the deal appear to outweigh the potential upside articulated by the Ritchie Bros. board.
Ritchie Bros. is offering US$12.80 per share in cash and 0.5252 of a Ritchie Bros. share for each IAA share. It also plans to pay a special one-time dividend of US$1.08 per share to its own shareholders, contingent on the deal closing.
The company has said it disagrees with the ISS report and another from proxy advisory firm Glass Lewis that also recommends shareholders vote against the deal.
Ritchie Bros. says the transaction is expected to unlock “substantial additional value” that neither company could achieve on its own.
Several Ritchie Bros. shareholders have expressed concerns about the deal and announced plans to vote against the agreement which requires approval by shareholders of both companies.
This report by The Canadian Press was first published March 6, 2023.
Companies in this story: (TSX:RBA)
