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SG Fleet Group (ASX: SGF) is firmly in the sights of private equity group Pacific Equity Partners which is willing to pay a healthy premium to secure control of Australia’s largest vehicle fleet management and leasing group with a potential $1.2 billion bid.
Pacific Equity, which a year ago took a majority stake in Sydney-based electric vehicle charging hardware and software provider EVSE, has indicated it is prepared to pay $3.50 per share for SG Fleet – a 31 per cent premium to last Friday’s closing price of $2.67 per share and above the 52-week high of $3.43.
Today’s announcement pushed SG Fleet’s shares 20 per cent higher to $3.22 at 10.18am (AEDT) after hitting a peak of $3.26 in earlier trading.
The indicative price has been given the thumbs up by the SG Fleet board and the company’s largest shareholder, the South Africa-based Super Group, which has a majority stake of 53 per cent.
Super Group has been reported to have been seeking an exit of its SG Fleet stake for some time.
“The board of SG Fleet, together with its advisers, and in consultation with its largest shareholder, has determined that it is in the interests of all SG Fleet shareholders to engage with PEP (Pacific Equity Partners) on the indicative proposal and has granted PEP a period of exclusivity to facilitate PEP’s due diligence and enable it to put forward a binding offer and for the parties to concurrently negotiate a scheme implementation deed,” says the company.
Pacific Equity’s exclusivity expires at the end of this week on 29 November 2024.
SG Fleet has provided no further details on the details of the offer being proposed by Pacific Equity Partners, a Sydney-based investment group with about $12 billion in assets under management.
SG Fleet has more than 277,000 vehicles under management globally with operations in Australia, New Zealand and the UK.
The company posted a net profit after tax of $89.7 million in FY24, up 6.7 per cent from the previous year, as revenue rose 6.4 per cent to $1.15 billion.
Underlying net profit after tax of $89.7 million was up 19 .2 per cent for the year, which compares with a target of between $88 million and $95 million in FY25.
The earnings outlook led to a fall in the SG Fleet share price since August from a high of $3.43 to a low of $2.45 in October.
However, shareholders were rewarded with a special dividend of 15c per share, in addition to the 9.33c final dividend, taking the full-year payout to 33.93c in FY24
SG Fleet says there is no certainty that the indicative proposal from Pacific Equity Partners will lead to a binding offer.
“Any agreed transaction would require board approvals and negotiation of transaction documents,” says the company.
“The implementation of any transaction would also be subject to various conditions including shareholder and regulatory approvals.”
However, Super Group, a provider of logistics and mobility solutions in Africa, the UK, Europe and Australasia including car dealerships in Africa and the UK, has been reported in recent months to be a keen seller.
Super Group has been a cornerstone investor in SG Fleet since its listing on the ASX in 2014, upping its 43 per cent interest to a majority stake after the listing.
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