Canada's Ritchie to pay special dividend if investors back $7-billion IAA deal
(Reuters) -Canada's Ritchie Bros Auctioneers said on Tuesday it would pay a special dividend of $1.08 per share to its investors if they back its $7-billion deal for U.S. auto retailer IAA Inc.
Shareholders of both the companies are set to vote on March 14 on the deal that will allow Ritchie to tap into a growing market for heavy machinery and equipment, salvaged cars, trucks and motorcycles.
IAA shares rose 1% in the early trade.
However, Ritchie's shareholders including Luxor Capital Group, Eminence Capital, Deep Field Asset Management and Janus Henderson Investors have opposed the deal.
The latest move by Ritchie comes after proxy advisory firms Institutional Shareholder Services and Glass Lewis recommended that shareholders reject the deal, citing potential risks.
However, another proxy firm, Egan-Jones Proxy Services, on Monday recommended to vote for the deal.
Large investors Eagle Asset Management and Independent Franchise Partners, which own 2.92% and 4.75% respectively of Ritchie Bros, have also supported the combination.
The dividend will be paid subject to receipt of required shareholder approvals of the merger, Ritchie said adding that IAA shareholders will not be entitled to receive it.
The deal is expected to close on March 20.
(Reporting by Aishwarya Nair in Bengaluru; Editing by Arun Koyyur and Anil D'Silva)